Amendments made by Special Economic Zone Act, 2005Dr. Vinod K. Singhania
Object of the article
. Both houses of Parliament have passed The Special Economic Zone Act,2005 (³SEZ Act´). After its ascent by the President, the provisions of theSEZ Act will come into force on such date as the Central Government mayby notification in the Official Gazette, appoint. SEZ Act has made anumber of changes in the Income-tax Act. The article examines the impactof these changes.
Special provisions in respect of newly established units in Special Economic Zone [Sec.10AA]
A new section 10AA has been inserted to give income-tax concession to newly establishedunits in Special Economic Zone.
The following conditions should be satisfied to claim deduction under section 10AA ±
The assessee is an entrepreneur as defined in section 2(j) of SEZ Act, 2005. Entrepreneur is aperson who has been granted a letter of approval by the Development Commissioner to set aunit in a Special Economic Zone.
The unit in Special Economic Zone begins to manufacture or produce articles or things or provide services during the financial year 2005-06 or any subsequent year. Manufacture for this purpose means to make, produce, fabricate, assemble, process or bring into existence, byhand or by machine, a new product having a distinctive name, character or use and shallinclude processes such as refrigeration, cutting, polishing, blending, repair, remaking, re-engineering and includes agriculture, aquaculture, animal husbandry, floriculture,horticulture, pisciculture, poultry, sericulture, viticulture and mining.
The assessee has income from expose of articles or thing or from services from such unit. Inother words, the assessee has exported goods or provided services out of India from theSpecial Economic Zone by land, sea, air or by any other mode, whether physical or otherwise.
Books of the account of the taxpayer should be audited. The taxpayer should submit auditreport in Form No. 56F along with the return of income.
2.2 Amount of deduction:
If the above conditions are satisfied, one can claim deduction under section 10AA.