SEZ & STPI Norms

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Special Economic Zone (SEZ) Norms

SEZs continue to be powerful investment hubs in India, offering world-class infrastructure, simplified customs procedures, and robust fiscal incentives. Designed to promote exports and attract foreign investment, here are the updated benefits under the SEZ framework:
Duty-Free Access: Units enjoy duty-free import or domestic procurement of goods for development and operation within the SEZ.
Income Tax Exemption (Section 10AA): 100% exemption on export income for the first 5 years, 50% for the next 5 years, and 50% of reinvested profits for an additional 5 years.
No MAT Applicable: Minimum Alternate Tax (MAT) under Section 115JB has been removed for SEZ units set up on or before June 30, 2020.
ECB Access: SEZ units can raise up to USD 750 million per year via External Commercial Borrowings (ECBs) without maturity restrictions.
Tax Benefits: Exemption from Central Sales Tax, Service Tax, and various State levies (as per State Government policy).
Single Window Clearance: Seamless approvals at both Central and State levels streamline the setup and operational process
Software Technology Parks of India (STPI) Scheme
The STPI Scheme supports 100% export-oriented software development and IT-enabled services across India. It’s especially suited for tech start-ups and global service providers aiming to operate with minimal regulatory hassle.
Flexible Setup: Units can be established anywhere in India with 100% foreign equity permitted.
Duty-Free Imports: Import of hardware/software (including second-hand capital goods) is fully duty-exempt.
Simplified Approval: Jurisdictional STPI authorities can approve projects up to ₹100 crore investment under single-window clearance.
Relaxed Export Norms: Only positive Net Foreign Exchange (NFE) earnings required, ideal for start-ups and early-stage ventures.
DTA Sales: Permissible up to 50% of the export value, allowing some flexibility in tapping the domestic market.
Capital Repatriation: Profits, royalties, and investments by foreign entrepreneurs are freely repatriable after applicable tax payments.
CSR & Donations: After two years, imported equipment can be donated to educational or charitable institutions without duty.
Depreciation: 100% depreciation allowed on capital goods over five years, aiding in financial planning.

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