Millennium Post

You can pay in foreign currency for services given by SEZ units

Relaxing the SEZ norms, the Reserve Bank has allowed domestic companies to make payments to units in special economic zones in foreign currency for the services delivered by them.

Earlier this facility was allowed only for payments made towards goods.

‘It has been decided to allow ADs (banks) to sell foreign exchange to a unit in the domestic tariff area (DTA) for making payment in foreign exchange to a unit in the SEZ for the services rendered by it (a unit in SEZ) to a DTA unit,’ the central bank said in a notification released on Tuesday.

The move assumes significance as the tax-free zones are losing sheen because of withdrawal of tax incentives.

To attract investments in these zones, the commerce ministry is expected to soon announce some more incentives for SEZs to be set up in backward areas.

However, RBI said that such payments would be authorised for only those services which are mentioned in the letter of approval issued to SEZ units.

Also to promote rising software exports, RBI in a separate notification said it has simplified the procedure for exporting goods and services by all software technology parks.
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