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Parameters |
SEZ unit |
STPI unit |
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| Location |
To be located only within the notified SEZ, as developed by a SEZ Developer. |
Anywhere within the jurisdiction of concerned STPI authority. |
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Period and quantum of income tax holiday |
Tax holiday for export profits available as follows (No sunset clause):-
- 100% for first 5 years from the commencement of operations,
- 50% for next 5 years and
50% for next 5 years to the extent of profits ploughed back and transferred to SEZ Re-investment Reserve to be utilized in the prescribed manner. |
100% tax holiday for export profits for a period of ten years from commencement of operations; tax holiday is however available only up to March 31, 2009 (under a sunset clause as per current regulations). |
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| Other relevant Income Tax incentives |
Exemption from levy of Minimum Alternate Tax (“MAT”) @ 11.22% on entire book profits from SEZ operations. |
MAT leviable on profits attributable to STP sales to domestic customers. |
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| Approved Activities |
Covers manufacturing, services, trading and warehousing activities. |
Covers only development and exports of “computer software"," data processing”, “data management” and other prescribed “IT enabled services”. |
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Customs Duty |
Exemption from all the duties of Customs on imports. |
Exemption from all the duties of Customs on imports. |
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Excise Duty |
Exemption from all the duties of Excise on local procurements. |
Exemption from all the duties of Excise on local procurements. |
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| Central Sales Tax applicability |
A SEZ Unit is exempted from payment of CST on inter-state purchases. |
A STP unit can claim reimbursement of CST paid on inter-state purchases. |
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| Service Tax |
- Exempt provided the Export of Service Rules, 2005 conditions are satisfied
- Service tax is exempt on taxable services provided to a unit in an SEZ
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- Exempt provided the Export of Service Rules, 2005 conditions are satisfied
- Rebate/refund of Cenvat Credit on input services may be available, if used in taxable services exported
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| Customs-Bonding requirements |
- Notified area under SEZ is already bonded under custom law, hence SEZ units are not individually required to seek grant of Private Bonded Warehouse License
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- STP units have mandatory requirements to undertake customs bonding for availment of duty exemption on imports/local procurement of assets
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Domestic Tariff area (“DTA”) sales |
- No limit for DTA sales made by SEZ Unit, however such sales could be made on payment of applicable duties
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- DTA sales from the STP Unit are permitted upto 50% of Free on Board (“FOB”) value of exports, subject to meeting positive NFE and on payment of applicable duties
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Time limit for realization of export proceeds |
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- Within 6 months from the end of the financial year
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