Online SEZ Applications to Begin in October

Posted by Reading Time: < 1 minute

Sept. 24 – Companies wanting to establish units in special economic zones in India may begin applying online starting October as part of government efforts to cut down transaction costs and attract more business.

“The benefit would be that units would be able to do transactions very fast. Their transaction cost will be reduced dramatically…We expect that by middle of next month we will be fully on that system,” said D.K. Mittal, additional secretary at the Ministry of Commerce.

The move will also make it easier for authorities to manage information related to SEZs. Mittal added: “We have asked our development commissions to go to the notified zones at least once a month and have an open house discussion. This should start from October 1.”

India wants SEZs to spur economic growth and attract more investments by offering quality infrastructure and ideal fiscal packages. During the last fiscal year, 122 operational SEZs exported Rs.2.2 trillion worth of goods, a 121.4 percent increase compared to the previous period. SEZs have also provided more than 550,000 jobs for Indians with total investment reaching more than Rs.1.66 trillion.

Following the Income Tax Act,  SEZ units in India are qualified for a 100 percent income tax exemption on export income for the first five years, 50 percent exemption for the next five years thereafter as well as a 50 percent exemption for reinvested export profits.

Authorities have assured investors that special economic zone incentives will be exempted from the new direct tax code until 2014 although there may be a proposed 20 percent minimum alternative tax based on a version approved by the Cabinet recently.

For more information or advice on establishing a business in one of India’s special economic zones, please contact Dezan Shira & Associates at