Procedure for Seeking Letter of Approval in SEZ

[RULE 18 & 19]

IT companies who have been allotted land RGCTP (SEZ) are required to submit application to the Development Commissioner NOIDA in the formal prescribed at Form F of the SEZ Rules, 2006, in five copies, with a copy to the Developer, alongwith the following documents :-

  1. A DD amounting to Rs.5,000/- in favour of 'Pay & Accounts Officer, Ministry of Commerce & Industry, Department of Commerce' payable at 'New Delhi'.

  2. Complete Project Report giving therein promoters bio-data, manufacturing process, cost of the project, means of financing etc.

  3. Copy of Memorandum & Articles of Association in case of Pvt. Ltd. Of Public Ltd. Company.

  4. Copy of Registered Partnership Deed in case of partnership firm.

  5. Copies of Passport, PAN and last three years' Income Tax Returns in respect of Directors/Partners/Proprietor, as the case may be.

  6. Copy of buy-back agreement/marketing tie up, if any.

  7. Copy of Importer Exporter Code (IEC), if already obtained from O/o the DGFT, alongwith copy of application filed with the concerned issuing authority.

  8. Copies of PAN alongwith last three years' audited Balance Sheets in respect of existing business, if any.

  9. Copy of Provisional Offer of Allotment of space from the developer.

The Approval Committee may approve or reject a proposal placed before it within fifteen days of its receipt. However, where the approval is to be granted by Board of approvals, the Board shall approve or reject a proposal within forty five days of its receipt.

On approval of a proposal, Development Commissioner shall issue a Letter of Approval (LOA) in Form-G, for setting up of the unit in SEZ.

The LOA shall remain valid initially for one year for the purpose of implementation, which may be extended further by the Development Commissioner for valid reasons for a further period not exceeding two years. Once the unit commences production the LOA shall be valid for five years from the date of commencement of production or service activity and is shall be construed as a license for all purposes related to authorized operations.

[RULE 11 (6)]

After obtaining LOA from the Development Commissioner, the unit shall approach the developer of that SEZ, in which the unit is to be set up, for allotment & possession of space. Only units having valid LOA may be allotted space in the processing area of SEZ by developer on lease basis and the lease period shall be co-terminus with the validity of LOA.

[RULE 22]

For availing exemptions, drawbacks and concessions for authorized operations, the unit shall execute a Bond-cum-LUT in Form-H of the SEZ Rules on Rs. 100/- stamp paper, which shall be jointly accepted by the Development Commissioner and by the Specified Officer. The Bond-cum-LUT shall accompany the following :-

  1. Copy of Board Resolution/Authority in favour of obligor(s).

  2. Residence & Identity Prof of witnesses as well as obligor(s).

  3. Chart showing calculation of bond amount as per Rule 22(iv) (b) of the SEZ Rules, 2006.

  4. In case of Pvt. Ltd. Or Public Ltd. Company, common seal is to be affixed on Bond-cum-LUT.

  5. Stamp Paper is to be bought and notarized from the concerned State Govt. in which the SEZ is situated.

  6. Address of operational website.

[SECTION 51 of the SEZ Act]

Besides, wherever required, units in SEZ are to obtain necessary registration/approvals/clearances/NOC as per relevant Rules/Laws of the concerned State Government e.g. Trade Tax, Power, Pollution Control, Labour etc.


Incentives & Facilities available to Units in SEZ

  1. Exemption from duties on procurement / import of goods required for development, operation and maintenance of the authorized operations.

  2. Exemption from Service Tax.

  3. Exemption from payment of Stamp Duty.

  4. Exemption from Central Sales Tax against Form - I.

  5. 100% exemption from Income Tax for first five years under section 10AA of the Income Tax Act, 50% for next five years and 50% of the ploughed back export profit for next five years.

  6. Single window clearance for Central and State level approvals.

  7. Exemption from Value Added Tax (VAT) and Electricity Duty.




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