Can existing SEZs de-notify?

Yes — under Rule 74, SEZ developer / units can apply for de-notification. Process involves clearing customs / tax dues, returning concessions on lapse and gazette de-notification.

What are minimum sizes for different SEZs?

Multi-Product SEZ: 1000 hectares; Sector-specific SEZ: 100 hectares; IT/ITES/Biotech: 10 hectares with 1 lakh sqm built-up; FTWZ: 40 hectares.

Can I sell goods from SEZ to DTA?

Yes — but treated as imports into DTA, attracting customs duty + IGST. Specific procedures and rate calculations apply.

Are SEZ units eligible for export incentives?

SEZ units are eligible for various export-related incentives — duty drawback, refund of unutilized ITC, etc., subject to specific conditions.

Special Economic Zones (SEZ)

SEZ developer notification, unit licensing, tax incentives, exit / de-notification — comprehensive advisory under the SEZ Act, 2005.

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Overview

Understanding Special Economic Zones (SEZ)

Special Economic Zones (SEZs) under the SEZ Act, 2005 are designated areas with relaxed business and customs regulations and significant tax incentives. They aim to promote exports, FDI and economic activity. Different categories — Multi-Product, Sector-Specific (IT, biotech, gems & jewellery), Free Trade & Warehousing — have distinct minimum land area and infrastructure norms. SEZ developers obtain notification through the Board of Approval (BoA); units within SEZ apply to the Approval Committee. SEZ tax holidays under Section 10AA were sunset for new units from April 2020 (with some pending grandfather), though existing SEZ units continue to enjoy benefits through their designated period. We advise SEZ developers and units on notification / re-notification, unit setup, customs and tax compliance, employee secondment, compliance audits, de-notification, exit and Domestic Tariff Area (DTA) sale.

Why Legal Door

Built for Outcomes, Trusted Pan-India

Specialist lawyers, transparent pricing and end-to-end execution from first call to final order.

SEZ Lifecycle Coverage

From greenfield notification to de-notification and exit.

Tax & Customs Integrated

IT, indirect tax and customs counsel within single team.

BoA & Approval Committee Liaison

Active filings with Board of Approval and zonal Development Commissioners.

DTA Transition Support

For SEZs exiting / de-notifying, DTA conversion and tax / customs handling.

What We Cover

Key Highlights

SEZ developer notification under Section 3-4

Co-developer arrangements

Unit approval under Section 15

Tax holidays under Section 10AA (existing units)

Customs duty exemption on imports

Service tax / GST exemption / refund

Employee secondment and visa coordination

Annual / quarterly compliance reports

De-notification and exit (Rule 74)

DTA sale and conversion

Our Process

How We Help You

A straightforward, transparent path from first call to resolution.

1Eligibility

Map sector, land area, infrastructure and business case for SEZ.

2BoA Filing

File notification application with detailed master plan, financial closure, environmental clearances.

3Notification

BoA approval; gazette notification; de-bonding from DTA.

4Operations

Customs procedure, tax compliance, periodic audits.

5Exit / De-notification

Where required, file Rule 74 application; address customs and tax dues.

Legal Framework

Applicable Laws & Regulations

Key statutes, rules and judicial precedents that govern this service.

Special Economic Zones Act, 2005

Statutory framework for SEZ creation and operation.

SEZ Rules, 2006

Operational rules including notification, unit approval and de-notification.

Income Tax Act — Section 10AA

Tax holiday for SEZ units (sunset for new units from April 1, 2020).

Customs Act / GST Acts

Customs duty exemption and GST treatment for SEZ.

Avoid These Mistakes

Common Pitfalls

Costly errors we routinely help clients fix — or better, avoid altogether.

Sunset of Section 10AA

New units after April 1, 2020 cannot avail Section 10AA tax holiday — significantly reducing SEZ attractiveness.

Annual Compliance Lapses

Missing annual returns or Net Foreign Exchange (NFE) reports invites de-notification.

DTA Sale Restrictions

Sale of goods / services to DTA from SEZ has duty / IGST implications often misunderstood.

Employee Misclassification

SEZ units often have HR confusion on employee jurisdiction; secondment arrangements need careful structuring.

FAQs

Common Questions

Everything you need to know before you begin

Section 10AA tax holiday is sunset for units commencing operations after April 1, 2020. Customs and GST exemptions for inputs continue. New SEZ developer benefits also significantly curtailed.

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