New norms provide greater flexibility for SEZ units to retain tax advantages

Under the revised guidelines, for units providing semiconductor manufacturing services, the value of goods received or exported on a free-of-cost (FOC) basis must now be included in NFE calculations, aligning SEZ norms with Customs valuation practices.

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SEZ units are required to be net foreign exchange earners over a five-year period—a key condition to access various benefits under the SEZ Act, such as certain duty-free imports.

Launched in 2021 as part of the broader production-linked incentive (PLI) scheme, the India Semiconductor Mission (ISM) aims to develop a robust semiconductor and display ecosystem and position India as a global hub for electronics manufacturing and design. The government is currently working on the next phase of the ISM rollout.