Vibrant Gujarat Global Investment Summit

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  • Context (TH): PM inaugurates the 10th Vibrant Gujarat Global Investment Summit in GIFT City, Gujarat.
  • The focus will be on futuristic technologies like semiconductors, green hydrogen, e-mobility, space manufacturing, renewable energy, financial services, and technology.

Gujarat International Finance Tec-City (GIFT City)

  • It is a multi-service Special Economic Zone (SEZ) with an International Financial Services Centre.

SEZ

  • SEZ is an area designated to set up units to carry out specific manufacturing and trading activities and provide certain services.
  • It is considered a foreign territory where the goods and services going into the SEZ are considered exports, and goods and services coming from the SEZ are imports.

International Financial Service Centre (IFSC)

  • It is a multi-service SEZ in Gift City.
  • IFSC is India’s first Offshore financial centre.
  • They deal with the cross-border flow of money and financial products and services.
  • The key institutions permitted to set up an IFSC unit are the Banking sector, Insurance sector, and Capital Markets.

What Are The Benefits of GIFT City?

1) Income Tax Benefits

  • 100% tax exemption for 10 years out of 15 years (IFSC Unit has the flexibility to select any 10 years out of 15 years block).
  • Interest income paid to non-residents on money lent to IFSC units is not taxable.
  • Long-term Bonds & Rupee-denominated bonds listed on IFSC exchanges are taxable at rate of 4%.
  • Transfer of specified securities listed on IFSC exchanges by a non-resident not treated as transfer – Gains accruing thereon not chargeable to tax in India.

2) Goods and Services Tax (GST) Benefits

  • GST does not apply to services received by the unit in IFSC, provided to IFSC/SEZ units, and offshore clients.
  • GST applies to services provided to Domestic Tariff Areas.
  • GST does not apply to transactions carried out in IFSC exchanges.

3) Other Taxes and Duties

  • State Subsidies – Lease rental, PF contribution, electricity charges.
  • There is an exemption from Security Transaction Tax (STT), Commodity Transaction Tax (CTT), and stamp duty on IFSC exchanges.
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