Page 156 - DCOM508_CORPORATE_TAX_PLANNING

Unit 6: Tax Planning: FTZ, SEZ and 100 % EOUs

Demerger: Demerger is a form of corporate restructuring in which the entity’s business operations Notes
are segregated into one or more components.
Electronic Hardware Technology Park (EHTP): It means any park set up in accordance with the

Electronic Hardware Technology Park Scheme notified 21 by the Government of India in the
Ministry of Commerce and Industry
Export turnover: Export turnover means the consideration in respect of export of articles or things
or computer software received in, or brought into, India by the assessee in convertible foreign
exchange in accordance with sub-section (3), but does not include freight, telecommunication
charges or insurance attributable to the delivery of the articles or things or computer software
outside India or expenses, if any, incurred in foreign exchange in providing the technical services
outside India

Free Trade Zone (FTZ): A free trade zone or export processing zone (EPZ), also called foreign-trade
zone, formerly free port is an area within which goods may be landed, handled, manufactured or
reconfigured, and re-exported without the intervention of the customs authorities.

Relevant assessment year: It means any assessment year falling within a period of ten consecutive
assessment years referred to in this section.
Software Technology Park (STP): It means any park set up in accordance with the Software
Technology Park Scheme notified by the Government of India in the Ministry of Commerce and

Industry.
Special Economic Zone (SEZ): It means a zone which the Central Government may, by notifi cation

in the Official Gazette, specify as a special economic zone for the purposes of this section.

Tax benefi t: A tax benefit is an allowable deduction on a tax return intended to reduce a taxpayer’s
burden while typically supporting certain types of commercial activity.

6.6 Review Questions

1. Write short note on Free Trade Zone.

2. What are the conditions to be fulfilled in Free Trade Zone?
3. Throw some light on the deductions of Free Trade Zone.

4. Describe the consequences of amalgamation and demerger Free Trade Zone.

5. Elucidate the conditions to be fulfilled under Special Economic Zone.
6. Describe the amount of deduction in Special Economic Zone.
7. Highlight the consequences for amalgamation and demerger in Special Economic Zone.
8. What are 100% Export Oriented Unit (EOU)?

9. Describe the categories of 100% EOUs.
10. Discuss the deduction part of 100% EOUs.

Answers: Self Assessment

1. Free Trade Zone 2. Ninety per cent
3. No 4. Electronic hardware technology park
5. Software technology park 6. Section 10AA

7. Export 8. 100 per cent

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