Fiscal Incentives

IFSC in India

Tax incentives announced in Budget 2016

  • Minimum Alternate Tax (MAT) reduced from 18.5 % to 9 % in IFSC

  • Commodity Transaction Tax (CTT) waived off

  • Dividend Distribution Tax (DDT) abolished

  • Long Term Capital Gain (LTCG) waived off

  • Tax Holiday

(GoG has also exempted stamp duty for entities having registered office in GIFT for capital market activities).

Indirect Tax

IncentivesConditionsRemarks
Customs duty Exemption from customs duty for all goods imported into the SEZ used for authorized operations Any removal of goods from SEZ into DTA would attract Customs duty
Central excise duty Exemption from duty of excise on domestic procurement to carry authorized operations Removal of goods into DTA liable to customs duty
Drawback Drawback and such other benefits on goods brought Goods supplied to SEZ regarded as export for customs purpose
Deemed export Supply of goods or services by an EOU unit or STPI unit regarded as export FTP regards supplies to SEZ as export of goods or services
Service Tax Exemption from service tax on services procured by the SEZ unit used for authorized operations Entails compliances as prescribed under the relevant notification
CST Exemption from CST on inter-state procurement of goods used for authorized operations Entails compliance of issuing Form I by the SEZ unit to the supplier of goods
Electricity duty/ Stamp duty/ Registration fees Exemptions/ reimbursements under the Gujarat State Industrial and IT policy New IT policy introduced in February 2016

Tax incentives for SEZ Units (Non IFSC)

Sr. No.ParticularsBenefits
1 Profit Stage Exemption from Income Tax*
  • 100% for the first 5 years

  • 50% for the next 5 years

  • 50% of profits ploughed back for the next 5 years

2 Minimum Alternative Tax (MAT ) 18.5% (excluding surcharge and education cess) would be payable on book profit

Indirect Tax

IncentivesConditionsRemarks
Customs duty Exemption from customs duty for all goods imported into the SEZ used for authorized operations Any removal of goods from SEZ into DTA would attract Customs duty
Central excise duty Exemption from duty of excise on domestic procurement to carry authorized operations Removal of goods into DTA liable to customs duty
Drawback Drawback and such other benefits on goods brought Goods supplied to SEZ regarded as export for customs purpose
Deemed export Supply of goods or services by an EOU unit or STPI unit regarded as export FTP regards supplies to SEZ as export of goods or services
Service Tax Exemption from service tax on services procured by the SEZ unit used for authorized operations Entails compliances as prescribed under the relevant notification
CST Exemption from CST on inter-state procurement of goods used for authorized operations Entails compliance of issuing Form I by the SEZ unit to the supplier of goods
Electricity duty/ Stamp duty/ Registration fees Exemptions/ reimbursements under the Gujarat State Industrial and IT policy New IT policy introduced in February 2016