Exemptions / Incentives / Concessions- Part 1

 

 

 

 

 

1)   Exemption from Taxes, Duties or Cess – Sec 7 & Sec 54 of the Special Economic Zones Act, 2005.

Any goods or services exported out of, or imported into, or procured from the Domestic Tariff Area by, -

(i)   A Unit in a Special Economic Zone; or

(ii)   A Developer;

Shall, subject to such terms, conditions and limitations, as may be prescribed, be exempt from the payment of taxes, duties or cess under all enactments specified in the First Schedule.

 

THE FIRST SCHEDULE

(See sections 7 and 54)

Enactments

1.   The Agricultural Produce Cess Act, 1940 (27 of 1940).

2.   The Coffee Act, 1942 (7 of 1942).

3.   The Mica Mines Labour Welfare Fund Act, 1946 (22 of 1946).

4.   The Rubber Act, 1947 (24 of 1947).

5.   The Tea Act, 1953 (29 of 1953).

6.   The Salt Cess Act, 1953 (49 of 1953).

7.   The Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955).

8.   The Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957).

9.   The Sugar (Regulation of Production) Act, 1961 (55 of 1961).

10. The Textiles Committee Act, 1963 (41 of 1963).

11. The Produce Cess Act, 1966 (15 of 1966).

12. The Marine Products Export Development Authority Act, 1972 (13 of 1972).

13. The Coal Mines (Conservation and Development Act, 1974 (28 of 1974).

14. The Oil Industry (Development) Act, 1974 (47 of 1974).

15. The Tobacco Cess Act, 1975 (26 of 1975).

16. The Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978).

17. The Sugar Cess Act, 1982 (3 of 1982).

18. The Jute Manufactures Cess Act, 1983 (28 of 1983).

19. The Agricultural and Processed Food Products Export Cess Act, 1985 (3 of 1986).

20. The Spices Cess Act, 1986 (11 of 1986).

21. The Research and Development Cess Act, 1986 (32 of 1986).

2)   Special fiscal provisions for Special Economic Zones- Chapter VI of the Special Economic Zones Act, 2005

 

I.     CUSTOM DUTY

Every Developer and the entrepreneur is entitled to -

(a) exemption from any duty of customs, under the Customs Act, 1962 or the Custom Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or service provided in, a Special Economic Zone or a Unit, to carry on the authorised operations by the Developer or entrepreneur- Sec 26(1)(a) of the Special Economic Zones Act,2005.

(b) exemption from any duty of customs, under the Customs Act, 1962 or the Customs Tariff Act, 1975 or any other law for the time being in force, on goods exported from, or services provided, from a Special Economic Zone or from a Unit, to any place outside India- Sec 26(1)(b).

Points to note:

1)   Exemption is available on both goods imported from SEZ and goods exported from SEZ by developer or Entrepreneur.

2) Exemption is available only for carrying authorized operation by the entrepreneur or developer.

3)  Benefit is also available to contractor appointed by developer or co-developer provided all documents are in joint name of developer and Contractor – Rule 10 

II.  CENVAT

Exemption from CENVAT and Special duty of Excise

Every Developer and the entrepreneur is entitled to exemption from any duty of excise, under the Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or any other law for the time being in force, on goods brought from Domestic Tariff Area to a Special Economic Zone or Unit, to carry on the authorised operations by the Developer or entrepreneur – Sec 26(1) (c) of the Special Economic Zones Act, 2005.

Points to note:

1)   Exemption is available only for carrying authorized operation by the entrepreneur or developer

2)   Benefit is also available to contractor appointed by developer or co-developer provided all documents are in joint name of developer and Contractor – Rule 10 of the Special Economic Zones Rules, 2006.

 

III.    SERVICE TAX

Every Developer and the entrepreneur is entitled to  exemption from service tax under Chapter-V of the Finance Act, 1994 on taxable services provided to a Developer or Unit to carry on the authorised operations in a Special Economic Zone; – Sec 26(1)(e) of the Special Economic Zones Act, 2005

Further, this exemption is also available to Unit under construction as per Rule 31 of the Special Economic Zones Rules, 2006.

 

IV.    Central sales tax

Every Developer and the entrepreneur is entitled exemption from the levy of taxes on the sale or purchase of goods other than newspapers under the Central Sales Tax Act, 1956 if such goods are meant to carry on the authorized operations by the Developer or entrepreneur. – Sec 26(1) (g) of the Special Economic Zones Act, 2005.