2.  INCEPTION
 Asia’s First Export Processing Zone developed in Kandla in 1965
with a view to promote exports.
Due to shortcomings experienced on account of multiplicity of
controls and clearances, absence of World class
Infrastructure, and an unstable fiscal regime and with a view to
attract larger foreign Investments in India , the Special
Economic Zone Policy was announced in 2000.
 SEZ’s in India functioned from 1st November2000- 9th February
2006 under the provisions of Foreign Trade Policy and fiscal
Incentives were made effective through the provision of
relevant statutes.

3. • THE SEZ ACT 2005, was passed by parliament on May 2005,
however after extensive consultations , supported by SEZ rules it
came into effect on 10th February 2006.
•SEZ rules provided for
 Simplified procedures for development, operation, and
maintenance of the Special Economic Zones and for setting up
units and conducting business in SEZs
Single window clearance for setting up of an SEZ
Single window clearance for setting up a unit in a Special
Economic Zone
Single Window clearance on matters relating to Central as
well as State Governments
Simplified compliance procedures and documentation with an
emphasis on self certification.

4.  INCENTIVES
& FACILITIES OFFERED TO SEZ
The Incentives & Facilities Offered to SEZ are in two ways:
a) Incentives & Benefits offered to the Units in SEZ
b) Incentives & Benefits offered to SEZ Developers.
a) Incentives & Benefits offered to the Units in SEZ
 Duty free import/domestic procurement of goods for
development, operation and maintenance of SEZ units
 100% Income Tax exemption on export income for SEZ units
under Section 10AA of the Income Tax Act for first 5
years, 50% for next 5 years thereafter and 50% of the
ploughed back export profit for next 5 years.
 Exemption from minimum alternate tax under section 115JB
of the Income Tax Act.
 External commercial borrowing by SEZ units upto US $ 500
million in a year without any maturity restriction through
recognized banking channels.
 Exemption from Central Sales Tax.
 Exemption from Service Tax.
 Single window clearance for Central and State level
approvals.
 Exemption from State sales tax and other levies as extended
by the respective State Governments.

5. b) Incentives & Benefits Offered to SEZ Developers
 Exemption from customs/excise duties for development of SEZs
for authorized operations approved by the BOA.
 Income Tax exemption on income derived from the business of
development of the SEZ in a block of 10 years in 15 years under
Section 80-IAB of the Income Tax Act.
Exemption from minimum alternate tax under Section 115 JB of
the Income Tax Act.
Exemption from dividend distribution tax under Section 115O of
the Income Tax Act.
Exemption from Central Sales Tax (CST).
Exemption from Service Tax (Section 7, 26 and Second Schedule
of the SEZ Act)

6. Export Performance in SEZ's
140%
120%
Growth Percentage
100%
80%
60%
40%
20%
0%
Series1
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
39%
32%
25%
52%
93%
50%
121.40%

7. There are 173 Operational SEZ’s in India.
Some of them are:
 SEEPZ Special Economic Zone
 Kandla Special Economic Zone
Cochin Special Economic Zone
Madras Special Economic Zone
Vishakhapatnam SEZ
 Falta SEZ
 NOIDA Export Promoting Zone

8.  EOU scheme was introduced in the year 1980 vide Ministry of
Commerce resolution dated 31st December 1980.
The purpose of the scheme was basically to boost exports by
creating additional production capacity.
It was introduced as a complementary scheme to the Free Trade
Zones/ Export Processing Zone (EPZ)Scheme introduced in the
sixties, which had not attracted many units due to locational
restrictions.
T he exporters showed willingness to set up units with long
term commitment to exports under Customs bond operations
provided they had the freedom to locate them in places of their
choice and given most of the benefits as provided to units set up in
the Zones

9. The Export Oriented Units (EOUs) are governed by the provisions of
Chapter 6 of the Foreign Trade Policy (FTP) and its procedures, as
contained in the Handbook of Procedure (HBP)
 The Scope of EOU has changed over the years. It was initially set
up for manufacturing sector with certain minimum value addition in
terms of export earnings. Presently it includes not just the aforesaid
but also services, software
development, repair, remaking, reconditioning, reengineering, agric
ulture etc.

10.  EOUs are allowed to procure raw materials/ capital goods duty
free, either through import or through domestic sources.
 Reimbursement of Central Sales Tax (CST)
Reimbursement of duty paid on fuels procured from domestic oil
companies.
CENVAT credit on the goods and service and refund thereof.
Fast track clearance facilities;
Exemption from Industrial Licensing for manufacture of items
reserved for SSI sector.

11. Software Technology Parks of India was established and
registered as an Autonomous Society under the Societies
Registration Act 1860, under the Department of Information
Technology, Ministry of Communications and Information
Technology, Government of India on 5th June 1991 with an
objective to implement STP Scheme, set-up and manage
infrastructure facilities and provide other services like
technology assessment and professional training.

12.  To promote the development and export of software and software
services including Information Technology (IT) enabled services/ BioIT.
 To provide statutory and other promotional services to the
exporters by implementing Software Technology Parks (STP)/
Electronics and Hardware Technology Parks (EHTP) Schemes and other
such schemes which may be formulated and entrusted by the
Government from time to time.
To provide data communication services including value added
services to IT / IT enabled Services (ITES) related industries.
To promote micro, small and medium entrepreneurs by creating
conducive environment for entrepreneurship in the field of IT/ITES.

13.  to establish Software technology park’s / centers at various
locations in the country.
To perform various financial management functions which
comprises inter alia the following activities.
To do all such acts and things as may be required in order to ful
fill the objectives of STPI.