GIFT City: The new booming hub

KEY FEATURES:

All the electricity cables will be underground, and ABB Groups of Switzerland will design its power grid. Gas supply to the city is provided by the existing gas Network of GSPL for gas transmission pipelines. District Cooling System will give the cooling system in GIFT City, which will reduce the operational cost by 30-40% and avoid the capital cost of implementing coolers in each building. All waste of the city will be treated through plasma gasification, which will be automatically gathered/ vacuumed through underground pipes

India’s only operational smart city and International Financial Services Centre (IFSC), GIFT City has also been awarded the GREEN CITIES’ PLATINUM’ Certification for ‘Green Master planning & design and Implementation of GIFT City’s phase I development’ by CII’s Indian Green Building Council (IGBC). GIFT City is India’s first Greenfield Smart City to achieve the IGBC Green Cities Platinum rating. The global and Indian companies consider GIFT City an ideal destination in sync with their environmental and sustainability goals.

GIFT City has strategically planned to achieve high energy efficiency through a district cooling system and 100% LED street lighting. The city has also embraced water management through a 35% reduction in potable water and treatment & reuse of 100% wastewater. Considering the National importance of solid waste management,

GIFT City has installed an automated waste collection and segregation plant.

IGBC, with the support of all the stakeholders, is spearheading the 21st-century green building movement in India. As of date, over 6,540 green building projects, amounting to over 7.82 billion sq. ft of the green building footprint, are adopting IGBC green standards for buildings and the built environment. IGBC aspires to facilitate 10 billion sq. ft of green building footprint by 2022.

TAX INCENTIVES AVAILABLE TO SEZ UNITS OTHER THAN IFSC UNITS SETUP IN GIFT CITY:

Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units.

Exemption from customs duty for all goods imported in the SEZ used for authorized operations.

Supply of goods or services from Domestic Tariff Area (DTA) to a unit located in SEZ Unit is regarded as a zero-rated supply (irrespective of

the currency in which payment is being made).

Goods and Services supplied to SEZ regarded as export for customs purpose.

Goods and Service Tax (GST)

Supplies to SEZ are Zero Rated under IGST Act, 2017

No GST on services,

Received by unit in SEZ/IFSC

Provided by SEZ/IFSC units to offshore clients

Single window clearance for Central and State level approvals

TAX INCENTIVES AVAILABLE TO UNITS SETUP IN IFSC, GIFT CITY:

A. Direct Tax:

Units in IFSC:

100% tax exemption for 10 consecutive years out of 15 years

MAT / AMT @ 9% of book profits applies to Company / others setup as a unit in IFSC. MAT not applicable to companies in IFSC opting for new tax regime

From 01 April 2020, dividend income distributed by Company in IFSC to be taxed in the hands of the shareholder

Dividend received by non-residents from an IFSC unit taxable at a concessional rate of 10% plus applicable surcharge and cess

Surcharge and health and education cess not applicable on certain incomes earned by specified funds in the IFSC

Investors:

Interest income paid to non- residents on monies lent to IFSC units not taxable

Interest on Long Term Bonds and Rupee Denominated Bonds listed only on a recognised stock exchange in IFSC: (1) Issuance before 01 July 2023 – Taxable at a lower rate of 4% (2) Issuance on or after 01 July 2023 – Taxable at a rate of 9%

Transfer of specified securities listed on IFSC exchanges by a nonresident or Category III AIF located in IFSC not treated as transfer Gains accruing not chargeable to tax in India – Specified securities include Bond, GDR, Foreign currency denominated bond, Rupee denominated bond of an Indian company, Derivatives, Unit of a Mutual Fund, Unit of a business trust, Unit of Alternative Investment Fund and Foreign currency denominated equity share of a company

Income of a non-resident on transfer of non-deliverable forward contracts or offshore derivative instruments or over-the-counter derivatives or distribution of income on offshore derivative instruments entered with an Offshore Banking Unit of an IFSC exempt from tax.

Income received by a non-resident from a portfolio of securities or financial products or funds, managed or administered by any portfolio manager on behalf of such non-resident, in an account maintained with an Offshore Banking Unit of an IFSC, to the extent such income accrues or arises outside India is exempt from tax and is not deemed to accrue or arise in India.

B. Indirect Tax:

Units in IFSC:

No GST on services received by unit in IFSC

GST applicable on services provided to DTA

Investors:

No GST on transactions carried out in IFSC exchanges

Other Tax Incentives:

Units in IFSC: State Subsidies – Lease rental, PF contribution, electricity charges

Investors: Exemption from STT, CTT, stamp duty in respect of transactions carried out on IFSC exchanges