CNC Group recommends move of Manufacturing plants to India in the Special Economic Zones (SEZ) set-up by the Government of India and State Governments, the key benefits are given below –
- SEZs are an ideal vehicle for setting up 100% export companies i.e., importing raw materials (as Government supports favorable import duties) and exporting finished goods.
- 100% tax deduction on export profits for the first five years, 50% tax deduction for the next 10 years and a 50% tax deduction on reinvested export profit for the following five years
- Provides a pro-business infrastructure, including simplified licensing as well as regulatory process and procedures.
- Additional incentives are exemptions from – a) VAT (Value Added Tax), b) Excise duties and c) Custom duties. Note – These are dependent on the state in which the SEZ is located.
- Also the Government has allowed exemptions from – a) DDI (Dividend distribution income), b) CST (central sales tax), c) ST (services tax ) and d) Minimum alternative tax
The Governments of the states of Karnataka, Maharashtra, Gujarat and Tamil Nadu actively support the set-up of SEZs as also Haryana, Uttar Pradesh and Assam.