|
|
To add impetus to investments in India, the Government of India has come up with the SEZ policy. This has worked well for the country which has already been witnessing major multinational making India an important location for their operations. The key excerpts of the SEZ policy, form a company looking to take space in a SEZ stand point are
- The Unit (Company that intends to take space in a SEZ) should be a net foreign exchange earner, cumulatively in the first five years of operation to be eligible for the benefits . However, no minimum net foreign exchange earning or export performance requirement has been laid down.
- Every unit that wishes to set up a facility in an SEZ is required to make a minimum investment of Rs 5 million (about US$ 125,000) towards plant & machinery.
- The space in a SEZ can only be leased and can not be acquired (bought).
- There would be 2 zones in a SEZ namely processing zone and a non Processing zone.
- Processing zone would be an access controlled area allocated for the core services and manufacturing facilities eg. Only Biotechnology research, production etc can take place in the processing zone of a Biotech SEZ, spaces such as hotels, recreation facilities, residential developments cannot be part of this area.
- Non Processing zone is the part of the SEZ which can be used to develop social infrastructure such as hotels, schools, hospitals, residential spaces etc. to support the processing zone.
- A Unit planning to take up space in an SEZ should file and application with the development commissioner with a copy duly sent to the developer of the SEZ (In most cases the developers of the SEZ would assist the units in the application procedure).
- A unit set up in the SEZ can also cater to the local domestic market in India. However, in this case two books of accounts need to be maintained one for exports and the other for domestic production. Here the goods and services sold in the Indian market would not be given any tax benefits.
- Profits from operations within the SEZ’s can be repatriated freely, without any dividend balancing requirements.
|
|
