Moving from stpi to sez

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Krishna Mohan (Querist)
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08 December 2011 For claiming Sec.10 benefit in SEZ, there is a condition that it should be a new unit; now, if an existing STPI unit want to shift to SEZ, can it claim SEc.10 benefit or not?

Manoj Malpani

Manoj Malpani (Expert)
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10 December 2011 The exemption in Income Tax has been given so as to encourage new Investment. Also Sec 10AA is linked to provisions of Sec 80IA wherein it is mentioned that in order to claim exemption under this section, the old plant & machinery should not be in excess of 20%. If it exceeds then the exemption will not be appicable. Also it should be ensured that the new SEZ Unit is not formed by spilting the Existing Unit. If this is proved then also the exemption will not be available.

These all are tricky issues and if properly planned and implemented then it is fairly possible to set SEZ Unit.

Guest

Guest (Expert)

10 December 2011 Dear Krishna Menon,

Here are my answers to your question :

1. The relevant provisions
of section 3, and these rules, as far as may be, apply for transfer of
Letter of Approval of a Developer under clause (a) of sub-section (9) of
section 10.

2. Besides the lengthy debonding process, and during that period of time, there would be no benefit from either incentive i.e the STPI nor the SEZ.

Summing up, the 2007 Union Budget specifically excludes enterprises resulting from the re-organization of previously existing entities, or by the transfer of previously used Plant & Machinery.

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