You are on page 1of 15

PGDM & PGDMLM

(Section B)

SPECIAL ECONOMIC ZONE (SEZ)

SIOM (PGDMLM-B)

INDEX
Introduction
Meaning of SEZ Procedure for getting or setting up of an SEZ Objectives Features of SEZ RULES OF SEZ Tax framework of SEZ Advantages & Disadvantages Transfer of SEZ Conclusion

INTRODUCTION
China was the first country in Asia to recognize SEZ & second was Indonesia. Third is India. SEZ in India functions from 01-11-2000 to 0902-2006 under the provisions of trade policies. It create employment opportunities to the backward areas. The SEZ was located in the different areas like Chennai, Cochin, Noida and West Bengal.

MEANING OF SEZ
SEZ is the geographical region having liberal economic laws which functions as a free trade zone (FTZ) and warehouse zone for manufacturing goods and rendering services. It aims at providing an internationally competitive hassle free environment for export and increases the foreign investments by giving tax and business incentives to the units in SEZ.

PROCEDURE FOR GETTING OR SETTING UP OF AN SEZ

1. For a person 2. By the state government 3. By the central government

This is the procedure for setting up of an SEZ

OBJECTIVES
Generation Of Additional Economic Activity Promotion Of Exports Of Goods And Services Promotion Of Investment From Domestic And Foreign Sources Creation Of Employment Opportunities Development Of Infrastructure Facilities

RULES OF SEZ
Single Window Clearance For Setting Up Of SEZ Single Window Clearance For Setting Up Of An Unit In SEZ

Single Window Clearance On Matters Relating To Central As Well As State Government Simplified Compliance Procedures And Documentation With An Emphasis On Self Certification

FEATURES OF SEZ
No License required for Import Manufacturing, Trading or Services activities allowed Single Window Clearance and Self Certification Financial Incentives like Tax Holidays, Duty Free Imports and Exports High Quality Infrastructure

SEZ Tax Framework


For SEZ Developers*

Direct Tax
For SEZ Units

10 year tax holiday out of 15 years Exemption from levy of MAT Exemption from levy of DDT

15 year phased tax holiday to units operating in SEZs and earning export profits 100% in first 5 years; 50% in next five years; and 50% in last 5 years [subject to certain conditions] Need to satisfy certain Unit formation criteria essentially around new green-field investment Exemption from levy of minimum alternate tax @ 11.33% [on book profits]

SEZ Tax Framework

Exemption from customs duty on imports Exemption from excise duty on local procurements

Exemption from service tax on services provided to a SEZ Unit; exemption on exports made by unit need to meet criteria of Export of Service Rules

Indirect Tax

Central Sales-Tax exemption on sale/ purchase of goods for authorized operations other than newspapers, where such sale takes place in the course of interstate trade or commerce Drawback of duties paid on goods/ services bought from outside SEZ area

advantages
Investment (FDI)
Employment Opportunities Foreign Exchange

Technology & Management

DISADVANTAGES
Farming land Compensation Pollution Land grabbing at throw away prices Tax exemptions exploitation leading to downward impact on tax collection

TRANSFER OF SEZ
Inter unit Transfer of Goods or Services Transfer of SEZ units SEZ to SEZ SEZ to Outside of SEZ Transfer Of SEZ Developer

CONCLUSION
SEZ is planning to enter the private sector Employment opportunities is more With the help of SEZ we are earning foreign exchange Abundant supply of technical skilled man power

THANKS

A &

uestions
nswers