IT & ITES 'SEZ'

By 2010, over 60-70 million sq ft of IT/ITES specific office space is expected to come up through SEZs
alone in India. About 57% percent of the notified SEZs belong to the IT/ITES category. IT/ ITES SEZs
have been extremely attractive for Foreign Direct Investment (FDI), having received an estimated FDI
of Rs. 34.29 crore/ hectare as compared to Rs. 0.89 crore/ hectare for non IT/ ITES SEZs..Of the
IT/ITES space expected to come up in 7 major cities, Pune would lead with nearly 24 million sq. ft. of
the total supply estimated to come up by 2011 - 12. Of the direct employment potential of SEZs
estimated at 2.1 million by 2009-10, over 60% is to be generated by IT/ITES sector alone. Over 1.3
million additional jobs proposed to be created by IT/ITES SEZs are nearly at par with the current
level of employment in the sector.

Benefits to the units operational within SEZs:

Central Government Incentives

Duty-free import/domestic procurement of goods for development, operation and maintenance of SEZ
units.
100% Income Tax exemption for SEZ units under Section 10AA of the Income Tax Act for first 5 years,
50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity
restriction through recognized banking channels.
Exemption from Central Sales Tax.
Exemption from Service Tax.
Single window clearance for Central and State level approvals.
Exemption from State sales tax and other levies as extended by the respective State Governments.
(Section 7.26 and second schedule)

State Government Incentives

Exemption from the State and local taxes, levies and duties, including stamp duty.
Exemption from electricity duty or taxes on sale of self generated or purchased electric power for use
in the processing area of a Special Economic Zone.
Allow generation, transmission and distribution of power within a special Economic Zone subject to the
provisions of the Electricity Act, 2003 (No. 36 of 2003).