Facilities/incentives offered to units operating in Free Trade Zones:
- Exemption from import duty on capital goods, raw materials, spare parts, tooling and packaging.
- Exemption from import licensing as all imports to the FTZs have been placed under OGL
- Capital goods, raw materials etc supplied to the zones from the rest of the country are treated as exports and are eligible for admissible export benefits
- Financé is provided on concession term
- Exemption is given from municipal taxes and sales tax
- Cash subsidy benefit is offered on investment in fixed assets
- Items banned for the rest of the country can be imported with few exemptions in the free trade zones.
- Ø Items manufactured in and exported form the zone are exempted from the export control order but prescribed export duty has to be paid
- Goods manufacture within the zone and meant for exports are exempted from central excise and other levies
- Transport subsidy is provided to units operating in the zones
- Foreign exchange sanctioned including blanket permit for export promotion is granted.
- Sale of goods permitted to Indian domestic market against value added is at least 30%
Ø Manufacturing units in the free trade zone are now allowed to offload up to 25% of their production in the domestic tariff area under the payment of relevant duties
- Five – year income tax holiday on profits earned.
As a supplement to EPZs a centrally sponsored export promotion industrial park (EPIP) scheme has been introduced in August, 1994 with a view to involving the state governments in production. It provides for 75% (limited to rupees 10 cores) grand to state governments towards creation of such facilities. So far 18 proposals for establishment of EPIPs have been sanctioned.
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