Setting up a company in SEZ

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indira (Querist)
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31 May 2008 Dear all

How can I set up a private limited company in a SEZ. I am planning to set up a management consultant firm. My revenues would be mostly from foreign assignments.

Am I eligible to set up my company in SEZ as I am not going to manufacture or export any thing. And if I can what are my advantages.

please help me

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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10 June 2008 Aadvantages in SEZ:

The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment include:-

1. Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
2. 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
3. Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
4. External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
5. Exemption from Central Sales Tax.
6. Exemption from Service Tax.
7. Single window clearance for Central and State level approvals.
8. Exemption from State sales tax and other levies as extended by the respective State Governments.

The major incentives and facilities available to SEZ developers include:-

1. Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.
2. Income Tax exemption on export income for a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
3. Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.
4. Exemption from dividend distribution tax under Section 115O of the Income Tax Act.
5. Exemption from Central Sales Tax (CST).
6. Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).

taxindiaconnect

taxindiaconnect (Expert)
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30 April 2009 The moot question remains that whether a management consultation firm can be set up in a SEZ. A very vide definition has been provided in the SEZ Act for services, however the managment services have not been included in the list. Though one can contend that these services have not been excluded specifically as in the case of accouting and legal service there is a specific exclusion.

indira

indira (Querist)
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01 May 2009 Thanks, in case I set up my firm in SEZ how much of revenues can be from abroad and from domestic services? Is service tax exemption available for domestic services also?

Aashok Kumar Sharma

Aashok Kumar Sharma

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13 August 2025 ✔️ You are eligible to set up a management consultancy firm in an SEZ as a service provider.
✔️ Your main revenue should be from foreign clients (exports of service).
❌ Domestic services will not be exempt from GST or eligible for income tax benefits.
⚠️ You need to maintain positive Net Foreign Exchange over 5 years.
📄 Obtain approval from the SEZ Development Commissioner and apply for Section 10AA benefits post unit setup.

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