|
Q. |
What
is Free Trade and Warehousing
Zone (FTWZ)? |
| A. |
Free
Trade and Warehousing Zone is
a deemed foreign territory within
India which was created as a subsection
of the Special Economic Zone. |
|
| |
| Q. |
What
are the activities allowed inside
the FTWZ? |
| A. |
Activities
allowed inside the zone are as
mentioned below: |
| |
| • |
Trading
with or without labelling |
| • |
Packaging and repacking |
| • |
Re-sell, re-invoice,
or re-export of goods |
| • |
Refrigerated warehouse
storage |
| • |
Assembly of complete
and semi-knockdown kits |
|
|
| |
| Q. |
How
companies can operate through
the FTWZ? |
| A. |
CCFPL
will hold the goods on behalf
of clients and provide various
services (For Example: warehouse
management and labour) |
|
| |
| Q. |
Do
separate document need to be maintained
for DTA sales and FT sales in
order to gain the income tax benefits? |
| A. |
Yes,
Separate accounts need to be maintained
for products exported abroad and
supplied to DTA in order
to avail the income tax benefits. |
|
| |
| Q. |
What
is the minimum lease period between
the Unit Holder and FTWZ Developer
in order to be granted Unit Holder
Registration? |
| A. |
Per
the SEZ Rules of 2006, a 5 year
minimum lease period is required
between the FTWZ developer
and Unit holder. |
|
| |
| Q. |
Are
sales made to the DTA deemed exports?
|
| A. |
Yes.
If the Sales are made in foreign
currency. Sales made to DTA are
considered export. |
|
| |
| Q. |
Are
FTWZs exempted from Labour laws? |
| A. |
Normal
Labour Laws are applicable to
FTWZs and are enforced by the
respective State Governments.
The State Governments have been
requested to simplify the procedures/returns
and introduce a single window
clearance mechanism by delegating
appropriate powers to Development
Commissioners of FTWZs/SEZs. |
|
|
| Q. |
How
much time does it takes
to get the approval from
the committee to set up
a unit inside the FTWZ? |
| A. |
Approval
takes up to 45 days or 6
weeks from the date the
proposal is submitted to
the approval committee. |
|
| |
| Q. |
Is
100 % Foreign Direct Investment
allowed for setting up units
in a FTWZ? |
| A. |
Yes |
|
| |
| Q. |
What
benefits are applicable
to companies operating through
a FTWZ? |
| A. |
The
benefits of FTWZ include:
Import
Benefits:
| • |
Duty
deferment benefits,
thus unlocking working
capital |
| • |
Hassle‐free
business environment
in terms of local
laws regulatory
compliance |
| • |
24 / 7 Customs
clearance enhancing
speed and efficiency
of India distribution |
| • |
Quality control
capability prior
to duty‐payment
(will allow companies
to have quality
control on products
before the duty
payment |
| • |
Enabling Implementation
of Vendor Managed
Inventory (VMI)
Model |
| • |
Postponement
Distribution capabilities |
Export Benefits:
| • |
Products
from India entering
the FTWZ are treated
as an export thereby
providing immediate
export benefits
(Duty Drawback,
DEPB Credits etc.)
to suppliers or
companies in DTA |
| • |
This will allow
companies to consolidate,
value‐add
and conduct quality
control on these
products before
end distribution
world‐wide
increasing supply
chain efficiencies
(forward & reverse) |
| • |
Local Tax Exemption
(e.g. CST, Sales
Tax, Excise &
VAT) on purchase
of material from
DTA for the authorised
operations |
| • |
Ability to conduct
Quality Control
before despatch
from India and flexibility
of sending it back
to DTA for repairs
or replacement |
| • |
Hassle‐free
business environment
in terms of local
laws & regulatory
compliance |
| • |
Enhanced Capital
Cash Flow and Higher
Inventory Visibility |
ReExport
Benefits:
| • |
Income
Tax exemption on
Re‐export
of Imported goods |
| • |
Service tax exemption
on all activities
conducted inside
the FTWZ including
rentals & labour |
| • |
Exemption from
custom & stamp
duty on imports
into FTWZ, meant
for re-export out
of India |
| • |
Hassle free re‐export
of value added products |
| • |
Ability to leverage
India as a regional/global
distribution &
value addition hub |
|
|
| |
| Q. |
Are
income tax benefits applicable
on exported products from
a FTWZ to other SEZ or FTWZ? |
| A. |
No.
Income tax benefits are
not available on the export
of products to other SEZ/FTWZ |
|
|
| |
| Q. |
How
FTWZ is different from Custom
Bonded Warehouse? |
| A. |
Major
differences between FTWZ &
Custom Bonded Warehouse are as
listed below: |
| |
| • |
In Custom
bonded warehouse cargo
can be stored for a period
of 90 days without paying
Custom duty, post which
interest on custom duty
needs to be paid. In FTWZ
cargo can be stored for
longer period of time
without paying custom
duty |
| • |
Very limited scope
for Value additions inside
Custom bonded warehouse,
Whereas Value added services
are allowed inside FTWZ |
| • |
There is no exemption
of Service tax on services
availed inside Custom
bonded warehouse. All
the services availed inside
FTWZ are exempt of service
tax. |
|
|
| |
