SEZ, GIFT City and tax holidays — is this a do-it-yourself job?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: zone and centre regimes grant specified deductions and exemptions subject to conditions on activity, setup date and approvals.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Is the SEZ tax holiday still open to a new unit?
The honest answer is that it depends on when the unit is established, because these regimes carry conditions tied to the setup date and are periodically closed to new entrants. A benefit that was available to a unit set up in an earlier year may simply not be open now, and reading about the regime in general rather than the conditions currently in force is how groups reach the wrong conclusion. On any new project the first step is to establish which regime a unit established today can actually enter, and on what conditions, before the location decision is taken. That decision is expensive to reverse.
What makes GIFT City different from any other Indian location?
It is a distinct regime with its own approvals, its own permitted activities and its own conditions, rather than a general concession attaching to a place. What is available depends on which activity is approved and when the unit is established, so the regime cannot usefully be assessed in the abstract. As with any conditional regime, the questions worth asking early are which activity the approval will cover, what the continuing conditions require of the unit once it is running, and what happens to the claim if the business later changes shape.
Can we move an existing unit into a zone and claim relief?
Usually not in the way people hope. These regimes are aimed at new units, and the conditions are framed to prevent an existing business being reconstituted in a favoured location to pick up a benefit. Moving people and equipment across and calling the result a new unit is precisely what those conditions are written to test. Where there is a genuine expansion — new activity, new capacity, separately identifiable from what already exists — the position is different, but it has to be evidenced from the start, in the approval documents and in the way the unit is actually run and accounted for.
What happens if we breach a condition during the holiday period?
Eligibility is tested at establishment and the conditions then continue for the life of the claim, so a breach does not affect only the future. It can put the deduction claimed in the year of the breach in issue, and it invites attention to the years before it. Conditions typically attach to the activity carried on, to the approvals held, and to how the unit is kept separate from the rest of the business, all of which drift over time. The discipline that prevents trouble is dull: test each condition against the facts annually, and record the check when it is made.
Which approvals decide whether the tax holiday actually applies?
The approvals are not administrative paperwork sitting alongside the tax position. They largely define it. What activity was approved, for which unit, and from which date will be the first things looked at when a claim is examined, and a deduction claimed for activity outside the approval is difficult to sustain however commercially sensible that activity was. This is why the application deserves care at the time it is made. Groups that describe their activity loosely in order to keep options open often find the looseness working against them years later.
Does the holiday survive a change in the unit's activity?
It can be put at risk. The claim rests on the unit carrying on the approved activity within the conditions, so a shift into something adjacent — a new line, a different service, work for a different kind of customer — is a tax question as well as a commercial one. The safe sequence is to test the change against the conditions and the approval before it is made, and to vary the approval where that is what is needed. Discovering afterwards that the activity moved outside the approval leaves nothing to fix, only exposure to quantify.
How does an NRI prove residence to get the treaty rate?
With a tax residency certificate issued by the country you are resident in, plus Form 10F giving the details the certificate does not carry, plus a PAN in the payer's records. The certificate has to cover the period of the payment, and the payer needs it before paying, not afterwards. Missing any of the three and the deductor is obliged to withhold at the domestic rate, which turns a rate reduction into a refund claim. See TRC against Form 10F.
What are Form 15CA and Form 15CB?
They are the certification pair required before certain remittances leave India. Form 15CA is the remitter's declaration filed online; Form 15CB is the accountant's certificate supporting the tax treatment and the rate applied, including any treaty relief. Which combination you need depends on the nature and size of the payment, and banks will generally not process the remittance without them. See Form 15CA.
