What is GIFT IFSC, and why is compliance important for SEZ units?

GIFT IFSC (Gujarat International Finance Tec-City International Financial Services Centre) is a designated Special Economic Zone (SEZ) offering financial and business services. Compliance is crucial to ensure smooth operations, avoid penalties, and retain SEZ benefits such as tax incentives and regulatory ease.

What are the key periodic compliances required for SEZ units in GIFT IFSC?

SEZ units must fulfill the following periodic compliance requirements: Monthly Performance Report (MPR) – Details business activities and performance. Service Export Reporting Form (SERF) – Captures data on service exports. Annual Performance Report (APR) – Reports financial performance and Net Foreign Exchange (NFE) earnings. Investment and Employees Report – Tracks investments and employment statistics. Renewal of NSDL Portal Access & AMC Fees – Ensures continued access to SEZ Online portal for filings.

What transaction-based reporting is required for SEZ units?

In addition to periodic filings, SEZ units must report transaction-specific activities, including: Import Clearance – Adhering to SEZ customs clearance procedures. IGST Exemption Filings – To claim tax benefits on goods/services procured from the Domestic Tariff Area (DTA). Execution of Additional Bond-cum-Legal Undertakings – If required for specific transactions.

What happens if an SEZ unit fails to comply with these requirements?

Non-compliance can result in: Operational disruptions and delays. Financial penalties and loss of SEZ benefits. Potential revocation of SEZ status in serious cases.

How often should the Annual Performance Report (APR) be filed?

The APR must be filed once a year , providing detailed financial data, including Net Foreign Exchange (NFE) earnings, to evaluate performance compliance with SEZ regulations.

How do SEZ units benefit from the IGST exemption?

SEZ units can procure goods and services from the Domestic Tariff Area (DTA) without paying IGST , provided they submit the necessary filings and declarations as per SEZ rules.

Home > Compliance > GIFT SEZ Compliances – A Complete List

GIFT SEZ Compliances – A Complete List

Written By

Dhairya Chaniyara, Priya Kapasi Shah

Published on

March 4,
2025

Last updated on

March 4, 2025
13:44

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https://treelife.in/compliance/gift-sez-compliances/

Blog Content Overview

1 Key Periodic SEZ Compliances for Units in GIFT IFSC
2 Transaction-Based Reporting Requirements
3 Importance of GIFT SEZ Compliance
4 Conclusion

Establishing and operating a unit within the Gujarat International Finance Tec-City (GIFT) International Financial Services Centre (IFSC) offers numerous advantages, including strategic location and a business-friendly environment. However, to fully leverage these benefits, it’s imperative for businesses to adhere to the compliance requirements set forth by the Special Economic Zone (SEZ) authorities. This blog provides a comprehensive overview of the periodic and transaction-based reporting obligations essential for seamless operations in GIFT IFSC.

Key Periodic SEZ Compliances for Units in GIFT IFSC

Monthly Performance Report (MPR): Units are required to submit a Monthly Performance Report detailing their business activities and performance metrics for the preceding month. This report serves as a vital tool for the Development Commissioner to monitor the unit’s operations and ensure alignment with SEZ objectives.
Service Export Reporting Form (SERF): For units engaged in service exports, the SERF must be filed monthly. This form captures comprehensive data on the nature and value of services exported, aiding in the assessment of the unit’s contribution to foreign exchange earnings.
Annual Performance Report (APR): Annually, units must submit an APR, which provides a detailed account of their financial performance, including the Net Foreign Exchange (NFE) earnings. The Unit Approval Committee utilizes this report to evaluate whether the unit meets the performance criteria stipulated in the SEZ regulations.
Investment and Employees Report: This report offers insights into the capital investments made and employment generated by the unit. It is essential for validating the unit’s economic impact and adherence to the development goals of the SEZ.
Renewal of NSDL Portal Access and Payment of Annual Maintenance Contract (AMC) Fees: To maintain uninterrupted access to the SEZ Online portal, units must ensure timely renewal of their credentials and payment of the associated AMC fees. This portal is crucial for the electronic filing of various compliance documents and forms.

Transaction-Based Reporting Requirements

In addition to periodic reports, units may need to comply with transaction-specific reporting, depending on their operational activities:

Import Clearance at SEZ: Units importing goods or services into the SEZ must follow the prescribed customs clearance procedures, ensuring all documentation aligns with SEZ import regulations.
Filing for Integrated Goods and Services Tax (IGST) Exemption for Procurement from Domestic Tariff Area (DTA): SEZ units are eligible for IGST exemptions on goods and services procured from the DTA. To avail this benefit, appropriate filings and declarations must be submitted as per the guidelines.
Execution of Additional Bond-cum-Legal Undertaking: Depending on the nature of transactions, units might be required to execute additional bonds or legal undertakings, committing to fulfill specific obligations under the SEZ laws.

Importance of GIFT SEZ Compliance

Adherence to these compliance requirements is not merely a statutory obligation but a cornerstone for the smooth and efficient functioning of businesses within GIFT IFSC. Non-compliance can lead to operational disruptions, financial penalties, and could potentially jeopardize the unit’s status within the SEZ.

Conclusion

Operating within GIFT IFSC presents a unique opportunity to be part of a dynamic financial ecosystem. By diligently adhering to the outlined SEZ compliance requirements, businesses can ensure seamless operations and fully capitalize on the benefits offered by this premier international financial services center.

FAQs on SEZ Compliances

What is GIFT IFSC, and why is compliance important for SEZ units?

GIFT IFSC (Gujarat International Finance Tec-City International Financial Services Centre) is a designated Special Economic Zone (SEZ) offering financial and business services. Compliance is crucial to ensure smooth operations, avoid penalties, and retain SEZ benefits such as tax incentives and regulatory ease.
What are the key periodic compliances required for SEZ units in GIFT IFSC?

SEZ units must fulfill the following periodic compliance requirements:
- Monthly Performance Report (MPR) – Details business activities and performance.
- Service Export Reporting Form (SERF) – Captures data on service exports.
- Annual Performance Report (APR) – Reports financial performance and Net Foreign Exchange (NFE) earnings.
- Investment and Employees Report – Tracks investments and employment statistics.
- Renewal of NSDL Portal Access & AMC Fees – Ensures continued access to SEZ Online portal for filings.
What transaction-based reporting is required for SEZ units?

In addition to periodic filings, SEZ units must report transaction-specific activities, including:
- Import Clearance – Adhering to SEZ customs clearance procedures.
- IGST Exemption Filings – To claim tax benefits on goods/services procured from the Domestic Tariff Area (DTA).
- Execution of Additional Bond-cum-Legal Undertakings – If required for specific transactions.
What happens if an SEZ unit fails to comply with these requirements?

Non-compliance can result in:
- Operational disruptions and delays.
- Financial penalties and loss of SEZ benefits.
- Potential revocation of SEZ status in serious cases.
How often should the Annual Performance Report (APR) be filed?

The APR must be filed once a year, providing detailed financial data, including Net Foreign Exchange (NFE) earnings, to evaluate performance compliance with SEZ regulations.
How do SEZ units benefit from the IGST exemption?

SEZ units can procure goods and services from the Domestic Tariff Area (DTA) without paying IGST, provided they submit the necessary filings and declarations as per SEZ rules.

About the Author

Dhairya Chaniyara

Senior Associate | Financial Advisory | [email protected]

Focuses on direct tax and regulatory services with a specialization in GIFT IFSC. Brings experience from various industries, including manufacturing, FMCG, IT-ITES, and healthcare, to deliver impactful tax solutions.

Priya Kapasi Shah

Associate Partner | Tax & Regulatory | [email protected]

Heads Treelife’s Financial Advisory practice, specializing in investment structuring, cross-border transactions, and tax and regulatory advisory. Also leads on AIF setups and advisory services for GIFT IFSC.