FTWZ

Concept of Free Trade Warehousing Zones (FTWZs)

Free Trade Ware Housing Zones (FTWZ) are a special category of Special Economic Zones with a focus on trading and warehousing, envisaged to be Integrated Zones to be used as International Trading Hubs. FTWZ is governed by the provisions of the SEZ Act and the Rules and focuses on trading and ware housing There are six formally approved FTWZ and six in-principle FTWZ in India FTWZ Objectives Facilitate the import and export of goods and services with freedom to carry out trade transactions in free currency Creation of world-class infrastructurefor ware housing and trading One-stop clearance of import and export formality Export oriented FDI inflow Employment potential Competitiveness of industries Attractiveness of support/ancillary industries Boost to all-round economic activity FTWZ Logistics and Distribution Hub

The GOI announced in the Foreign Trade Policy

2004

2004-09 to set up Free Trade and Warehousing Zones Parliament of India passed the Special Economic Zone Act 2005 February, 2006 Government of India notified Special

2005 2006

Economic Zones Rules-2006 and also notified Special Economic Zone.

Provides Free Zone environment

Enables efficient operational environment for trade facilitation

FTWZ Benefits to Region / State

Provision of high quality infrastructure

Integrates various aspects of logistics operations

FTWZ Benefits
Fiscal and Regulatory Benefits Duty Deferment BenefitsCustom Duty deferment benefits for products requiring longer storage time Income tax (section 80IA) and Service Tax exemptions for developers and users of the zone~ reduces logistics costs for users of the zone Excise Duty Exemptions Excise duty exemption for products sourced from the domestic markets, including goods, spares, DG sets, packing materials, etc Administration Benefits

Delivery Time Reduction in custom clearance time and better logistics connectivity leading to improved delivery time Support Facilities and Effective Management Provision of efficient management services and international expertise along with support facilities such as banking, insurance etc. Administrative building and office Ancillary building Canteen Services building Covered parking Roads Security huts Container stacking area pavement In plant maintenance workshops General high mast lighting

Infrastructure Benefits Single Product Storage Facilities -Assist in meeting specific warehousing requirement for each product category e.g. different sections for storage of tea and coffee, etc

Shared warehousing Availability of temporary storage facilities to enable users to meet short term demand without incurring significant costs (e.g. leasing space for a year to meet 2/3 months demand)
Shared Equipment Ability of users to save on capital investments by leasing equipments provided by the zone

FTWZ Utilities

Horticulture and landscaping Boundary wall Water supply and sewerage Rain water and storm water drainage Effluents disposal system Telecom cables Power supply system

Benefits at a Glance
For Importer Flexibility towards end distribution. Duty deferment benefits (freeing up working capital & increasing sales). Quality control capability prior to duty- payment. Exemption on SAD, VAT & CST on imports through FTWZ. Service Tax exemption. Hassle-free re-export regulatory /duty implications. Reduced buffer stocks. Lowered product costs Foreign exchange transaction capability.
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Benefits at a Glance
For Exporter Products from India entering the FTWZ are treated as deemed export providing immediate benefits to suppliers. Local Tax Exemption (e.g. CST, Sales Tax, Excise & VAT) on all activities conducted inside the FTWZ. Export quotas able to be met for companies exporting into FTWZ. Increased efficiency through lowered reverse logistics through quality control before dispatch from India. Foreign exchange transactions capability. Increasing supply chain efficiencies (forward & reverse) while enhancing capital cash flow.
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Benefits at a Glance
For Re-Exporter Service tax exemption on all activities conducted inside the FTWZ including rental & labour. Exemption from custom and stamp duty on products imported into FTWZ; meant for re-export out of India. Income tax exemption on profit where applicable. Hassle-free re-export process. Permission of 100% FDI for the set-up of units by the unit holder of the FTWZ. Ability to leverage Indias cost, skill & geographic positioning advantage as a hub for regional/global distribution post Value Optimizing Services.
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