Tax incentives to SEZ developers Income tax Deduction from profits and gains from export of goods/services

as follows (Section 10AA) 100 percent income tax exemption for first five years 50 percent income tax exemption for next five years Income tax exemption for next five years to the extent of profits Reinvested (maximum 50 percent) Capital gains tax exemption on relocation to SEZ (Section 54GA): This is a controversial issue as to be eligible for income tax exemption; the unit should be a new unit. Further, a press statement from Hon. Minister for Commerce and Industry, Mr. Kamal Nath, mentions that SEZs are basically for fresh investments No TDS by overseas banking units on interest on deposits/borrowings from nonresident or person not ordinarily resident No minimum alternate tax Transferee developer enjoys 100 percent income tax exemption for balance period of 10 assessment years Indirect tax SEZ units may import or procure from domestic sources duty free, all their requirements of capital goods, raw materials, consumables, spares, packaging materials, office equipment, DG sets for implementation of their project in the zone without any license or specific approval No import duty on these goods imported No excise duty on these goods procured from domestic tariff area No service tax on services availed from domestic tariff area No value added tax and central sales tax on goods procured from domestic tariff area On goods procured from DTA, drawback under section 75 allowed to SEZ unit Goods imported/procured locally duty free could be utilized over the approval period of five years