SEZ unit eligibility: commence operations in SEZ; not formed by split or reconstruction except re establishment; no used machinery transfers.

Amendment to section 10AA prescribes that a SEZ unit must commence manufacturing, production or services in the relevant previous year and must not be formed by splitting up or reconstruction of an existing business, except where re-establishment or revival is permitted under the statute; it also bars formation by transfer of previously used machinery or plant and applies the Explanations 1 and 2 of the related provision to that bar.

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