SEZ Compliance Made Easy with Expert Solutions
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Navigating India's Special Economic Zones (SEZ) regulations can be complex. Our expert team offers comprehensive services to ensure your business stays compliant, from registration to tax exemptions and export obligations.
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Tailored Compliance Services
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Timely Reporting & Filings
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Customs, Tax & FDI Support
Special economic Zone and its statutory compliances
A Special Economic Zone (SEZ) is an area in which business and trade laws are different from the rest of the country. Almost every enterprise, which is in the business of production, manufacturing, exporting, and importing of goods wish to establish their business unit in these Special Economical Zones. However, to establish a business unit in these SEZs, one needs to take government approval. Once it’s registered as unit in SEZ, apart from the other laws, the unit should comply with the statutory filing requirement of SEZ Act 2005 and the other allied rules.
SEZs play a key role in rapid economic development of a country. In the early 1990s, it helped China and there were hopes (perhaps never very high ones, admittedly) that the establishment in India of similar export-processing zones could offer similar benefits — provided, however, that the zones offered attractive concessions.
The Special Economic Zone is constituted under The Special Economic Zone Act, 2005 and came into force with effect from 2006. The SEZs Rules, inter-alia, provide for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments.
We act as one stop source to all the requirements of a SEZ/STPI registered unit or the unit which is proposing to become a SEZ/STPI unit.
Key SEZ Compliance Requirements
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SEZ Registration
Before setting up operations in an SEZ, businesses must complete the registration process with the relevant authorities. This includes applying for SEZ status and obtaining approval from the Development Commissioner.
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Annual Compliance Reporting
Companies operating in SEZs are required to submit periodic reports to the authorities detailing their operations, including exports, imports, and financial performance.
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Maintaining Proper Documentation
Businesses must maintain detailed records of transactions, including export and import documents, contracts, and financial statements. These records must be made available for audit purposes.
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Adherence to Export Obligations
SEZ units are obligated to meet export targets set by the authorities. Non-compliance with export obligations may lead to penalties or the withdrawal of SEZ status.
5.
Customs and Duty Exemption Compliance
Companies must ensure that they comply with customs rules to avail duty exemptions on imports and exports within the SEZ. Proper filing of documents is essential to avoid issues with customs authorities.
6.
Environmental and Labor Compliance
SEZ units must comply with environmental standards and labor laws. Regular audits and inspections are conducted to ensure businesses are meeting these standards.
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Corporate Tax Compliance
SEZs offer tax benefits such as income tax exemptions and reduced rates. However, businesses must file tax returns and follow the guidelines for claiming these exemptions.
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Special Reporting and Approvals for Foreign Direct Investment (FDI)
Foreign investments in SEZs require adherence to FDI guidelines, including reporting and approvals from the Reserve Bank of India (RBI) and the Ministry of Commerce and Industry.
We provide the following services pertaining to SEZ activities
Legal Setting up of SEZ unit and execution of various agreements/undertakings at the time of SEZ unit registration.
Day to day and yearly compliances like filing and registration of contracts/ purchase orders, filing of Softex Forms
Monthly performance reports
Annual Performance Reports
Periodical forms, returns and statements with the STP authorities.
Filing of Service Exports Reporting form and helping of the unit for getting approval from the unit approval committee for various matters like extension of space, approval of changes in the shareholding and change of registered office etc.
Tax advisory services to the SEZ units on their day to day transactions, transfer pricing activities etc.
Why Choose Us
At Targolegal ,we understand the intricacies of SEZ compliance and offer a range of services to help businesses meet regulatory requirements. Our team of experts ensures that your SEZ operations are always in line with current laws and regulations.
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Tailored Compliance Solutions: We provide customized solutions based on your industry, size, and specific SEZ requirements.
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Timely Reporting and Filings: We ensure all necessary reports are submitted on time, helping you avoid penalties or legal issues.
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Comprehensive Documentation Support: We assist in maintaining the required documentation for audits, approvals, and reporting.
Overview
Importance of Registration
Registration Procedure
Documents Required
GST Registration
GST registration is a process by which a taxpayer gets themselves registered under GST. Once a business is successfully registered, a unique registration number is assigned to them known as the Goods and Services Tax Identification Number (GSTIN). This is a 15-digit number assigned by the central government after the taxpayers obtain registration.
Please note – If you are operating from more than one state, then you will have to take separate GST registrations for each state you are operating from.
Who is liable to get GST registration ?
All the businesses supplying goods, whose turnover exceeds INR 40 lakh in a financial year are required to register as a normal taxable person. However, the threshold limit is INR 10 lakh if you have a business in the north-eastern states, J&K, Himachal Pradesh, and Uttarakhand.
The turnover limit is INR 20 lakh, and in the case of special category states, INR 10 lakh, for the service providers.
Below, is the list of certain businesses for which GST registration is mandatory irrespective of their turnover:
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Casual taxable person / Input Service Distributor (ISD)
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Non-resident taxable person
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Inter-state supplier of goods and services
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Supplier of goods through an e-commerce portal
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Any service provider
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Liable to pay tax under the reverse charge mechanism
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TDS/TCS deductor
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Online data access or retrieval service provider
Goods and Service Tax is a tax levied on supply of goods and services right from the point of manufacture to the point of final consumption by the user. GST is a simplified indirect tax structure, wherein tax paid on goods/services procured by one person at one stage can be availed as credit while passing on the goods/services to the next stage, until they reach the final consumer who bears incidence of tax.
In the GST regime, businesses whose turnover from sale of goods exceeds Rs. 40 lakhs (Rs 20 lakhs for NE and hill states) or turnover from providing services exceeds Rs 20 lakhs , are required to register as a normal taxable person. For certain other businesses, registration under GST is mandatory irrespective of turnover, like those paying tax under the reverse charge mechanism, supply to SEZ, Exports etc.
Overview
Importance of Registration
Registration Procedure
Documents Required
Important facts about GST registration
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Any business that has a turnover of over 40 lakh INR (20 lakh for service sector) is required to register for GST.
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If you are a supplier of goods to more than one state, you are required to register for GST in all the states you supply goods.
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There is no registration fee for GST.
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Failing to file for GST will result in a fine of 10,00 INR or 10% of the due amount.
Advantages of GST registration
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Legal recognition of a business
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Uniform accounting of taxes
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Businesses will be eligible to avail of several benefits under the GST regime
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Legal authorisation of collecting tax from sales made
Overview
Importance of Registration
Registration Procedure
Documents Required
GST Registration Process Are As Follows:
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Information / Documents Collection
We undertake to collect the requisite information and documents for preparation of the GST Application for your business.
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Prepare an online Application for submission
We undertake to prepare your GST Application based on documents and information given to us and file the same with GSTIN.
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Registration Approval
The acknowledgement of Registration will reach you with 3-6 working days.
General Documents to be furnished
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Pan card copy of all directors/partners/proprietor
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Company pan card copy of pvt ltd / llp / partnership firm
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Rental agreement and electricity bill
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Company bank statement or cancelled cheque
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Address proof copy of all directors/partners/proprietor
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Photo copy of all directors/partners/proprietor
Additional Documents Required
GST Registration for Private Limited Company
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MoA and AoA
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Certificate of incorporation
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DSC
For LLP
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LLP agreement
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Certificate of incorporation
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DSC
For Partnership
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Partnership registration certificate
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Partnership deed
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DSC
Overview
Importance of Registration
Registration Procedure
Documents Required
Documents Required
Below is the list of documents that you will need for registering your business under GST.
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Permanent Account Number (PAN) of the applicant
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Copy of the Aadhaar card
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Proof of business registration or incorporation certificate
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Identity and address proof of promoters/directors with a photograph
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Bank account statement/cancelled cheque
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Authorisation letter/board resolution for authorised signatory
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Digital signature
FAQ
What is an SEZ, and why should my business consider setting up in one?
An SEZ (Special Economic Zone) is a designated area in India aimed at promoting industrial growth and attracting foreign investments. It offers various benefits such as tax exemptions, duty-free imports, and simplified regulations. Setting up in an SEZ can help businesses reduce operational costs and boost exports.
What are the key compliance requirements for businesses in SEZs?
Key compliance requirements include:
Registration and approval from the Development Commissioner
Maintaining proper documentation and financial records
Adhering to export obligations
Filing regular reports on exports, imports, and finances
Complying with tax and customs regulations
Following environmental and labor laws
How do I register my business in an SEZ?
To register, you must apply to the SEZ Development Commissioner with the required documentation, including your business plan, export details, and financial statements. Upon approval, you will receive SEZ status, allowing you to avail of benefits.
What are the export obligations for SEZ units?
SEZ units are required to meet export targets set by the authorities. These obligations must be fulfilled within a specified period to maintain SEZ status and continue enjoying the associated benefits.
What tax benefits are available for SEZ units?
SEZ units enjoy various tax benefits, such as:
Exemption from income tax for the first five years
50% tax exemption for the next five years
Reduced tax rates for the following five years
Exemption from central sales tax (CST), customs duties, and other levies on imports
Are there any penalties for non-compliance with SEZ regulations?
Yes, non-compliance can result in penalties, withdrawal of SEZ status, or other legal actions. It’s crucial to fulfill export obligations, file reports on time, and maintain the required documentation.
How often do I need to file compliance reports for SEZ?
Compliance reports are typically required to be filed annually, detailing exports, imports, financial performance, and adherence to SEZ regulations. The frequency may vary based on specific SEZ policies.
Do I need to pay customs duties on goods imported into an SEZ?
Goods imported into an SEZ are generally exempt from customs duties and taxes. However, businesses must ensure that all required documentation is submitted for customs clearance to avail these benefits.
Can foreign companies invest in SEZ units?
Yes, foreign direct investment (FDI) is permitted in SEZ units, subject to FDI guidelines and regulatory approvals from the Reserve Bank of India (RBI) and other authorities.
What are the labor and environmental compliance requirements for SEZ units?
SEZ units must comply with labor laws, including employee welfare and working conditions. Environmental regulations also apply, ensuring that businesses maintain sustainable operations within the SEZ framework. Regular inspections and audits may be conducted to ensure adherence.