FAQs

To promote the information Technology Industry in Gujarat and attract entrepreneurs to set up units in Gujarat, the Government of Gujarat has declared the IT Policy 2006-2011 vide G.R. No. ITP-102006-942-DST dated 1/11/06. The Department of Science & Technology ( DST) undertakes following activities for implementation of this policy:

  • Registration of units as ‘New’ / ‘Existing’ Unit.
  • Facilitation of investments including coordination with key infrastructure support providers
  • Monitoring of investment progress and feedback reporting to the government

Frequently Asked Questions

Q. 1. What are the high lights of IT Policy 2006-11?

Operative Period

1st November 2006 to 31st October 2011.

This scheme is applicable in the state of Gujarat only.

Mega IT Projects

On case to case basis, a special package of incentives will be offered for mega IT projects. Such projects will be defined as projects creating employment of more than 1000 in the case of IT unit and 1500 in the case of ITES unit. Alternatively, an investment of Rs.50 crores and above will be considered as a mega IT project. This policy has been extended to manufacturing of Semiconductor and other eco system products (as per Government of India’s Policy) as well.

Special Economic Zone ( SEZ)

The State Government will encourage the development of Special Economic Zone ( SEZ) as per Industry & Mines Department’s Notification No. GHU/2004(2)/SEZ-2003-617-G dated 15.05.2004
URL : http://imd-gujarat.gov.in/gr/notifications.htm External website that opens in a new window

This is in addition to the SEZ Act /rules farmed by the Government of India.
URL : http://sezindia.nic.in External website that opens in a new window

  • SEZ scheme has been introduced to provide hassle-free environment and state-of-the-art infrastructure
  • Gujarat has liberal labour policy providing complete flexibility in SEZs
  • SEZ Development committee monitors infrastructure development for each SEZ

For SEZ units – benefits

Income tax incentives

  • 10 year corporate tax holiday on export profit – 100% for initial five years and 50% for the next five years

Indirect tax incentives

  • Nil customs duty
  • Nil excise duty
  • Exemption from central sales tax
  • Exemption from service tax
  • Exemption from tax on sale of electricity for self generated and purchased power

Other benefits

  • Exemption of electricity duty – 10 Years'
  • Duty-free procurement of capital goods (including second hand capital goods), raw materials & consumable spares from domestic market.
  • Full freedom for sub-contracting
  • Facility to realise and repatriate export proceeds within 12 months
  • Facility to retain 100% foreign exchange receipts in the export earner's foreign currency account

For developers of SEZs – benefits

Income tax incentives

  • 100% tax holiday for a period of any 10 consecutive years out of 15 years beginning from the year in which the SEZ is notified
  • Exempt from dividend distribution tax
  • Tax exemption on interest of long term finance
  • Long-term capital gains arising on transfer of shares in developer company tax exempt
  • No minimum alternate tax (MAT)

Indirect tax incentives

  • Nil customs duty
  • Nil excise duty
  • Exemption from central sales tax
  • Exemption from service tax
  • Exemption from securities transaction tax
  • Exemption from tax on sale of electricity for self generated and purchased power

Other Benefits

  • Full freedom in allocation of developed plots to approved SEZ units on purely commercial basis
  • Full authority to provide services like water, electricity, security, restaurants and recreation centres on commercial lines
  • No net foreign exchange earning requirement imposed

Exemption from the payment of Electricity Duty

All new Information Technology Industry units have been exempted from the payment of Electricity Duty for a period of 5 years from the date of which the said unit commence its commercial operation. This may be downloaded from AnnexureD PDF file that opens in a new window (284 KB)

The captive power unit set up by eligible IT / New IT & ITES units will be exempted from payment of electricity duty as per provision of section 3 of Bombay Electricity Duty Act, 1958.

In case of IT/ ITES units State Government would pursue with Gujarat Electricity Regulatory Authority to change applicable category of tariff from Commercial to Low Tension Industry category.

Exemption from Power Cuts
IT & ITES unit will be considered eligible for exemption from power cuts.

Waiver of NOC from GPCB

IT/ ITES units engaged in provision and production of “IT services and IT Software” will not have to seek no-objection certificate from Gujarat Pollution Control Board. This, however, will not be applicable for those units engaged in production of Information Technology products.

Simplification of Labour Laws

The regulatory regime of labour laws has been simplified to suit the needs of IT & ITES companies. General Permission is granted to all IT & ITES companies to have 24x7 operations/to run in three shifts. The barriers pertaining to employment of women at night have been removed.

The Bombay Shops & Establishment Act,1948 have already been amended & new entry at Sr.no.120 in Schedule II of the said act has been added giving exemptions under sections 13,14,18 & 33 of The Bombay Shops & Establishment Act,1948. These sections pertain to opening and closing hours of commercial establishments, daily and weekly hours of work in commercial establishments, holidays in a week in commercial establishments and employment of young persons and women to work beyond the prescribed hours. These amendments would enable the IT & ITES units to run three shift operation on all seven days of the week, have flexi time operations, & would also enable employment of women after 7.00 p.m. and before 6.00 a.m.

(These amendments have been made by Labour & Employment Department vide Notification No. GHR-2003-78-FAC-1099-44-12-M3 dated 24th June, 2003 in respect of IT & ITES companies. This may be downloaded from AnnexureE PDF file that opens in a new window (186 KB)

The Self Certification-cum-Consolidated Annual Returns Scheme has been issued by Labour & Employment Department vide GR No. FAC-2003-3043-M(3) dated 05.12.2005 and the same has been extended from 01.01.2006 for five years vide GR No. FAC-2003-3043-Part-3-M(3) dated 20.03.2006. The details of the GR may please be downloaded from:
Self Certification-cum-Consolidated Annual Returns Scheme Word file that opens in a new window
AnnexureF PDF file that opens in a new window (763 KB)

Floor Space Index (FSI)

In order to facilitate adequate availability of floor space to IT/ ITES units in the urban centers, government will permit more than permissible FSI to IT Parks subject to payment of premium of such additional FSI at market rate. For this purpose relaxation of building height would be considered subject to state government’s prior approval and NOC by Airport Authority of India.

Q. 2. What is the procedure to avail any benefits/incentives under New IT Policy 2006-2011?

In order to avail benefits under the IT Policy 2006-2011, the unit is required to register with the Department of S&T as per the prescribed procedure.

Q. 3. What is the procedure for Registration?

The application form for registration of the new and existing unit is available on website www.dst.gujarat.gov.in External website that opens in a new window as well as www.gujaratinformatics.com External website that opens in a new window. Registration certificate is issued after due verification as per the prescribed checklist.

Q. 4. What is definition of New IT Unit?

"The" Eligible New Information Technology Unit” means a new unit in IT industry set up after the cut-off date i.e. 1/11/2006. It should also fulfil the following criteria.

The New project should have obtained SSI registration from concerned District Industries Centre or obtained the Letter of Intent, Letter of Approval or obtained receipt against filling of Industrial Entrepreneur Memorandum.

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