SPECIAL ECONOMIC ZONE (SEZ)

The Government of India (GOI) has formulated a policy for setting up Special Economic Zones (SEZ) in India.

SEZs are proposed to be specially delineated duty free enclaves for the purpose of trade operations, duty and tariffs. These zones would be self-contained and integrated having their own infrastructure and support services.

Government of Andhra Pradesh (GoAP) proposed for the establishment of a Special Economic Zone near Visakhapatnam, in an extent of 9200 Acres.

Key incentives available for private sector developers and operators of SEZ (or its components) are as follows:

· 10-year tax holiday in a block of the first 20 years. Reduced peak corporate tax applicable is under consideration.

· Exemption from duties on all imports for project development.

· Exemption from excise/VAT on domestic sourcing of capital goods for project development.

· Full freedom in allocation of developed plots to units on purely commercial basis.

· Full authority to provide services such as water, electricity, security, restaurants and recreational facilities within the zone on purely commercial basis.

· No foreign ownership restrictions in developing zone infrastructure and no restrictions on repatriation.

· Freedom to develop township in to the SEZ with residential areas, markets, play grounds, clubs and recreation centres without any restrictions on foreign ownership.
· Income tax exemption benefits to bonds and capital raised by zone infrastructure developers.

Key incentives available under the existing policy framework for locating industries:

· Income tax holidays on business income
· Exemption from import duty, VAT and other Taxes
· 10% FDI allowed through the automatic route for all manufacturing activities.
· No restrictions on repatriation of profits.
· Procedural ease and efficiency for speedy approvals, clearances and customs procedures.
· Setting up an empowered authority for approvals, clearances, zone administration, and maintenance and dispute resolution.
· Simplification of procedures and self-certification in the labour acts.

The Government of Andhra Pradesh has taken an in-principle decision to support the project in an appropriate manner to make this project a meaningful investment proposition for the strategic partner and as a part of identification of strategic partners/developers.