FAQs

FAQs

Here we have attempted to answer all the questions that we have frequently been asked by our clients. If you have any other query, please e-mail us at aeropark@gmrgroup.in and we will reply to you at the earliest.

Q. What business zones GMR Aerospace Park has?
Business Zone divided into an aviation sector specific Special Economic Zone with a Free Trade Warehousing Zone and Domestic Tariff Area (DTA)

Q. Has GMR Aerospace Park got SEZ notification?
GMR Aerospace Park has notified 250 acres of land earmarked as aviation specific SEZ.


Q. Does GMR Aerospace Park includes a FTWZ?
Yes GMR Aerospace Park includes a FTWZ of about 19.85 acres area as a part of processing area within the SEZ and this area will specially be earmarked for trading activities.


Q. What advantages does GMR Aerospace Park has over other aerospace parks and SEZs?
As a world-class aerospace cluster, the strategic advantages the GMR Aerospace Park offers its clients are immense. Apart from the basic fiscal incentives, GMR Aerospace Park provides full range of services and benefits to its clients– from great connectivity, world-class infrastructure, dedicated runway access and up- and down-stream value chain advantages, to ancillary services easy access to aviation fuel, and even discounts at airport hotels and temporary accommodation. Please Visit Advantages page for details.


Q. What Infrastructure benefits are available at GMR Aerospace Park?
At GMR Aerospace Park, clients can rely on world-class infrastructure support to set up their enterprises. May it be a plot of land, Power, water or a custom-built building that your business requires, GMR Aerospace Park will provide a ready-to-use infrastructure solution. Please Visit Infrastructure page for details.


Q. How easy is it to access the Aerospace Park from the major cities?
The Park is well connected by air, road and rail, with robust road and rail network to ports. Its location on the National Highway 7 (NH7) between Hyderabad and Bangalore gives it access to one of India’s major highways. Please visit Connectivity page for details.


FAQ on Special Economic Zone:

Q. What is a Special Economic Zone?
Special Economic Zone (SEZ) is a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs exemptions.


Q. What is a DTA?
To cater to the needs of the domestic market GMR Aerospace park business zone includes facilities for companies to set up units outside the SEZ.DTA both with airside and landside access is available.


Q. What are the rules that govern the setting up of units in a SEZ in India?
There are two documents that govern the setting up of units in a SEZ:
1. The SEZ Act of India, 2005
2. The SEZ rules 2006
These documents can be downloaded from the website www.sezindia.nic.in


Q. What is the processing area in a SEZ?
The processing area is the bonded area within the SEZ where all manufacturing, services and trading units are located.



Q. What is the non-processing area (NPA) in a SEZ?

The NPA is the area outside the bonded area within the SEZ earmarked for commercial and other related development.



Q. What is the approval mechanism for the units to be set up in a SEZ?

All approvals are to be given by the Unit Approval Committee headed by the Development Commissioner (DC). Clearance from the Department of Policy and Promotion/Board of Approvals, wherever required will be obtained by the Development Commissioner. A Letter of Approval to set up a unit in a SEZ is issued by the DC, provided the unit meets all the criteria specified in the Application. The Application form, can be downloaded from www.sezindia.nic.in
The procedure of application is detailed under Clause 17 of the SEZ Rules, 2005.


Q Who monitor the functioning of the Developer/Developer jointly with Contractor/Unit in SEZ?
Performance of the SEZ Developer/Developer jointly with Contractor/Unit monitored by a Unit Approval Committee consisting of Development Commissioner, Custom and representative of State Govt. on annual basis.


Q. What are the obligations of the Unit under the SEZ Scheme?
Following are the SEZ Scheme Obligations:
  • SEZ units have to achieve positive net foreign exchange earned over five years i.e. Exports (FOB value of all exports) - Imports (CIF value of all imports) > 0.
  • For this purpose, a Legal Undertaking is required to be executed by the unit with the Development Commissioner
  • Annual Performance Reports must be submitted to the Development Commissioner
  • The units are also to execute a bond with the zone Customs for their operations in the SEZ



Q. Will there be a Customs House in a SEZ?.
Yes. There will be an on-site Customs House.


Q. Can SEZ units sell to the domestic market?
Yes. SEZ units can sell goods and services, including rejects and scrap or other by-products of the manufacturing process in the domestic market on payment of applicable customs and excise duties.


Q. Can SEZ units subcontract part of their production process (e.g. finishing process) to units in the DTA?
Yes. SEZ units can subcontract to units in the DTA which are registered with the excise department and also abroad with prior permission of the Specified Officer given on an annual basis. The goods sent out for subcontracting have to be returned to the SEZ within 120 days from the date of removal or within a period as may be extended by the Special Officer in charge of this procedure.


Q. If one buy goods from DTA should they require to pay State Sales Tax and Excise?
No, State has not exempted the sales from DTA to SEZ from local levies and taxes but undertake to refund.


Q. Will it be possible to supply to other Developer/Developer jointly with Contractor/Unit in SEZ?
Yes, Inter Unit Sales are permitted as per the Policy. Buyer procuring from another unit pays in Foreign Exchange.



Q. Whether SEZs have been exempted from Labor laws?
Normal Labor Laws are applicable to SEZs, which are enforced by the respective state Governments. The state Government has been requested to simplify the procedures/returns and for introduction of a single window clearance mechanism by delegating appropriate powers to Development Commissioners of SEZs.


Q. What are the facilities for Domestic suppliers to Special Economic Zone
Supplies from Domestic Tariff Area (DTA) to SEZ to be treated as physical export? DTA supplier would be entitled to:
  • Drawback/DEPB
  • CST Exemption
  • Exemption from State Levies
  • Discharge of EP if any on the suppliers
  • Income Tax benefit as applicable to physical export under section 80 HHC of the Income Tax Act.



FAQ on Free Trade Warehousing Zone

Q. What is Free Trade and Warehousing Zone (FTWZ)?
Free Trade and Warehousing Zone means a Special Economic Zone wherein mainly trading and warehousing and other activities related thereto are carried on


Q. What are the activities allowed inside the FTWZ?
Activities allowed inside the zone are as mentioned below:
  • Trading with or without labelling, packaging or re‐packaging, re‐sell, reinvoice or re-export of imported goods.
  • Refrigeration for the purpose of storage
  • Assembly of complete knock down or semi knock down kits



Q. Is sales to DTA considered as exports in fulfilling the NFE positive criteria?
Sales to DTA is considered as the export for fulfilling the NFE Criteria if the transactions are in foreign currency



Q. Is 100 % Foreign Direct Investment allowed for setting up units in a FTWZ?

Yes


Q. What are the benefits applicable to the companies operating through FTWZ?
The benefits of FTWZ are applicable in for:
  • Importing products into India through FTWZ
  • Exporting products out of India through FTWZ
  • Re‐exporting products out of India through the FTWZ

Import Benefits:

  • Duty deferment upto 2 years, 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





Q. Are income tax benefits applicable on exported products from a FTWZ to other SEZ or FTWZ?

No, Income tax benefits are not available on the export of products to other SEZ/FTWZ

 

 

Disclaimer: The contents hereof are provided for information purposes only. We request that potential business units seek their own independent advice in relation to any issues relating to information given in the section.