|
Concept |
Domestic tariff area (DTA) is where standard customs duties & GST applies. |
Considered outside customs territory of India for Authorized operations |
Designated duty-free enclave for manufacturing/service operations |
Enables manufacture and other operations in a Customs bonded warehouse with free import |
|
Registration Requirement |
CGST |
SEZ Act and CGST Act |
FTP Act and CGST Act |
Customs Act and CGST Act |
|
Approving Authority for setting up |
Standard |
Development Commissioner under the SEZ Act |
Development Commissioner under the FTP |
Jurisdictional Commissioner of Customs & GST |
|
Setting up requirement (Geographical location) |
Can be setup anywhere in India |
Can be setup only in areas designated / notified as SEZs |
Can be setup anywhere in India |
Can be setup anywhere in India |
|
Import of raw materials and consumables |
On payment of applicable customs duties (BCD, SWS, IGST, Compensation Cess, anti-dumping duty, etc.) (However, benefit of the advance authorization scheme can be availed which allows duty free import of inputs and consumables required for manufacture of export items) |
Exempt from payment of all applicable customs duties |
Exempt from payment of all applicable customs duties but IGST on import is to be paid (they can avail ITC on IGST) |
Exempt from payment of all applicable customs duties on export (on DTA sale, deferred payment on duty foregone on inputs) |
|
Import of Capital Goods |
On payment of applicable customs duties (BCD, SWS, IGST, Compensation Cess, anti-dumping duty, etc.) (However, benefit of the EPCG authorization scheme can be availed which allows duty free import of capital goods required for manufacture of export items) |
Exempt from payment of all applicable customs duties |
Exempt from payment of all applicable customs duties but IGST on import is to be paid (they can avail ITC on IGST) |
Exempt from payment of all applicable customs duties on export (on DTA sale, deferred payment on duty foregone on inputs) |
|
Procurement from DTA |
On payment of applicable GST (recipient can take input tax credit (ITC), if otherwise available) |
Such supplies will qualify as 'Zero rated supplies' i.e., the supplier has the option to make such supplies either without payment of applicable GST (under LUT) or on payment of GST (of which he can either take refund or the recipient SEZ unit can take ITC) |
Such supplies will qualify as 'Deemed Export supplies' i.e., such supplies will have to be made on payment of applicable GST of which the supplier / recipient EOU unit can take refund or the recipient EOU unit can take ITC |
On payment of applicable GST (recipient can take ITC, if otherwise available) |
|
Benefits on DTA procurement |
No benefits are available |
Benefit of either advance authorization scheme or All Industry Rate (AIR) of duty drawback can be availed by the supplier / unit. |
Benefit of either advance authorization scheme or All Industry Rate (AIR) of duty drawback can be availed by supplier / unit |
No benefits are available |
|
Income Tax benefits |
No benefits available |
No benefits available. Earlier some benefits were provided, however the same have been withdrawn now (deductions available to units' setup prior to July 2020) |
No benefits available. Earlier some benefits were provided, however the same have been withdrawn now (deductions available to units' setup prior to April 2012) |
No benefits available |
|
Excise duty benefit on local procurement |
No benefit available |
Fuel like HSD, natural gas, etc. can be procured without payment of excise duty for authorized operations. |
Fuel like HSD, natural gas, etc. can be procured without payment of excise duty for authorized operations. |
No benefit available |
|
DTA Clearances of finished goods |
NA |
On payment of applicable customs duties (BCD, SWS, IGST, etc), as applicable on import of such goods into India. Bill of entry is required to be filed with the customs authorities posted at the SEZ |
On payment of applicable GST (recipient can take ITC, if otherwise available). Additionally, benefit of BCD exemption availed on imported inputs used in the manufacture of finished product cleared in DTA is required to be surrendered / paid along with interest. Only tax invoice is required to be issued |
On payment of applicable GST (recipient can take ITC, if otherwise available). Additionally, applicable customs duties (BCD, SWS, IGST, etc.) will be payable on quantity of inputs / raw materials which have been used in the manufacture of such finished goods cleared in the DTA. Bill of entry for home consumption has to be filed in respect of such goods. |
|
Customs Benefit |
No general exemption on imports |
Upfront Exemption from BCD & all duties on import of goods |
Upfront Exemption from BCD on import of any goods |
Deferment of all customs duties on warehoused goods, waived if exported |
|
IGST Benefit |
No general exemption on imports |
Upfront Exemption from IGST & all duties on import of goods |
No exemption |
Deferment of IGST on warehoused goods, waived if exported |
|
Eligibility & Investment Criteria |
No specific eligibility or investment criteria |
Requires minimum land (Normally 50 hectares) |
Min. investment of INR 10 million in plant & machinery |
Any existing/new factory, no investment |
|
Validity of License |
NA |
5 years, extension permitted |
5 years, extension permitted |
NA |
|
Who can avail of the benefit? |
Units targeting domestic market |
Units undertaking to export their production |
Units undertaking to export their production |
Person granted license under Section 58/65 of Customs Act |
|
Export Obligation |
No Export Obligation |
Positive NFE requirement in 5 years from commencement |
Positive NFE requirement in 5 years from commencement |
No Export Obligation |
|
Trading is Allowed? |
Yes, without specific customs benefits |
Yes, for FTWZ units (for others with necessary approvals) |
No |
Yes, but interest applies beyond 90 days |
|
Export of finished goods |
Option to export either on payment of IGST (of which refund can be obtained later) or without payment of IGST (under LUT) |
Option to export on payment of customs duties (wherever applicable) |
Option to export on payment of customs duties (wherever applicable) |
Option to export either on payment of IGST (of which refund can be obtained later) or without payment of IGST (under LUT) |
|
Job Work/Sub-Contracting |
Allowed as under GST laws |
Allowed for manufacturing SEZ |
Allowed |
Allowed |
|
Import of Second-hand Capital Goods |
Yes (duty payable) |
Yes |
Yes |
No |
|
Input-Output Norm |
Not applicable |
Applicable |
Yes, as per SION if prescribed, else ad-hoc norms if wastage exceeds 2% |
Norms defined by company |
|
Benefit of Depreciation on Sale of Used Capital Goods |
Available (as per transaction value) |
Available (as per SEZ Act) |
Available (as per FTP act) |
Not available |
|
RoDTEP benefit on export of finished goods |
Available (unless exports are being made under advance authorization scheme) (this benefit can be availed along with duty drawback benefit) |
Available |
Available |
Not available |
|
Superintendence by authorities |
GST and customs authorities |
GST, customs authorities at their each locations & DC office at SEZ zonal location |
GST, customs authorities & DC office |
GST and customs authorities |
