How to set up SEZ unit?

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How to set up SEZ unit?

Overview

In our earlier post on Deduction under section 10AA for SEZ units, we saw the tax benefits available to the SEZ units. Here, we list out the procedure to set up a unit in SEZ. In India, the Special Economic Zones or SEZ areas are specifically notified and the rules/application procedure can slightly differ from state to state. Here, we list out the procedure to set up an SEZ  unit in one of the most popular areas in India: “Noida”.

Procedure for setting up SEZ unit in Noida
Documentation / Filing:

For setting up a unit in Special Economic Zone, the applicant has to apply in form-“F” (maybe downloaded from “NSEZ.GOV.IN”) given in SEZ Rules, 2006 along with the following documents:

  1. DD is amounting to Rs. 5000/- in favor 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/ Flowchart, cost of the project, means of financing List of CG/RM
  3. Copy of Memorandum & Articles of association in case of Company.
  4. Copies of passport, PAN and IT return for the last three years in respect of directors/partners/ proprietor as the case may be.
  5. Copies of the balance sheet for the last three years in the case of Pvt. Ltd Company or Public Ltd. Company.
  6. Copy of Buy-back agreement/marketing tie-up.
  7. Copy of Import-Export code, if already obtained from O/0 the Jt. DGFT.
  8. The requirement of space for the proposed project.
  9. Form – F in triplicate duly filled up
  10. Affidavit as per Form – F
Approval / Post-approval:

The Approval Committee will consider the proposal and approve it. After approval, the unit is issued a Letter of Approval (LOA).

On receipt of the LOA, the unit has to accept the terms and conditions of the LOA in terms of condition No. (Xii) of LOA and also has to apply for allotment of plot/SDF (Standard Design Factory), for implementation of the project.

Bond:

On completing the formalities of allotment of plot/SDF, the unit has to execute Bond cum legal undertaking in form –H of SEZ Rules on a non-judicial stamp paper of Rs. 100/- bought in the UP or state where the unit is located and notarized by a Notary public registered in the concerned State.

After acceptance of the Bond cum Legal undertaking, the unit has to apply for the issuance of import-Export code number in the format as given in Ayaat Niryat form along with the following documents:

  1. D. for Rs. 250/- as application fee.
  2. Banker’s certificate regarding maintenance of the current account.
  3. Two passport size photographs.
  4. Copy of PAN of the company.

For issuance of RCMC (Registration Cum Membership Certificate), the unit has to submit an application in App. 19 of Handbook of procedures Vol- I along with the following documents:

  1. Copy of IEC issued to the company.
  2. Banker’s certificate regarding financial soundness of the applicant.
Additional Requirements:

In addition to the above, the unit has to submit the following applications with State government/departments:

  1. NOC from Pollution Control Board
  2. Power connection from UPPCL
  3. Building plan from the O/o the DC
  4. Trade TAX registration from Commercial Tax Deptt. UP

The Development Commissioner, Noida SEZ has been delegated the powers of Labour Commissioner by the government of Uttar Pradesh to resolve Labour disputes and issue licenses under Factory Act/ Contract Labour( R& A)Act/ Shop & Commercial Establishment Act.

SDF is allotted to valid Letter of Approval(LOA) holders by DC on the recommendation of the Allotment Committee.

The tenancy Period is 5 years only.

The allotment fee is Rs. 1,750/- per sq. mtr (non-refundable). Security deposit is equivalent to one-year lease rent(refundable).

The lease rent is Rs.1832/- per sq. mtr. per annum.

Maintenance Charges is Rs. 20/- per sq. mtr per annum. Water charges is Rs. 1712/- per SDF per Quarter

(Source – http://www.nsez.gov.in/SettinUpEOU.aspx)

 

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About CA Mehul Gupta 30 Articles
Chartered Accountant in practice, Certified GST Practitioner & Commerce Graduate. He is mainly engaged in the practice of Direct taxes, GST, International taxation, & assurance services. A visiting faculty in the Faridabad Branch of ICAI.

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