section 10 A

[sathyanarayanan kasinathan]

Facts of the Case:  The Company proposes to register itself with the STPI in-order to claim tax benefits available under the Income Tax Act.

Questions:

Can invoice for the period 'June 2009 to December 2009' raised before registration with STPI and still tax exemption claimed for invoices after registration.

If Invoices are dated after registration , for services rendered prior to registration, Is that allowable for tax exemption, Treatment of carried forward losses upto registration date. Any Procedure/conditions to be complied with for converting this existing unit into an STPI.

Any suggestion you may deem fit.

[Surender Gupta]

In my the exemption u/s 10A for SEZ units are available for assessment year basis. Therefore, the invoices raised before getting registration but during the relevant previous year falling under sez exemption, you are very well eligible for the full exemption as per the scheme of section 10A. 

Regarding carried forward losses upto registration date, I am unable to understand the issue since, the exemption is available since commencement of the manufacturing or production, the brought forward losses may be from other activity or business which are not same. Therefore, more details are required to see this issue.

AI Summary

Tax exemption eligibility: invoices before STPI registration may qualify if they fall within the relevant assessment year. Invoices raised before STPI registration but falling in the relevant previous year for the export-unit exemption are eligible for full exemption under the assessment-year approach; invoices dated after registration for prior services are governed by the same temporal assessment-year rule. Carried forward losses up to registration require analysis of whether losses arise from the qualifying activity, and conversion to an STPI unit raises procedural and compliance questions needing further factual detail.