Section 115BAA. SEZ holidays. GIFT City exemptions. State capital subsidies. Transfer pricing benchmarks. Every incentive mapped. Every election analysed.
India’s corporate tax regime offers GCCs multiple pathways to optimise effective tax rates. The choice between concessional regime, SEZ benefits, and state incentives is not additive. It requires structural analysis of which combination delivers maximum retention over the GCC’s projected lifecycle.
Concessional rate for domestic companies forgoing specified exemptions. Effective rate includes surcharge and cess. Available from AY 2020-21 onwards.
100% deduction on export profits under Section 10AA. 50% for years 6 to 10. Requires minimum export obligations and SEZ compliance.
100% exemption for any 10 of 15 years. Zero GST. Zero stamp duty. Zero STT. Particularly suited for financial services GCCs.
Five states dominate the GCC incentive landscape. Each framework has distinct eligibility criteria, clawback provisions, and documentation requirements.
Up to 25% capital subsidy on fixed assets. 100% stamp duty reimbursement outside Bengaluru. ₹10,000 per employee incentive for first 500 employees. Priority land allotment through KITS framework.
Up to 20% capital subsidy. 100% stamp duty exemption for IT/ITeS units. ₹5,000 per employee per year for 5 years. T-Hub partnership access for GCC innovation labs.
Up to 20% subsidy on building and equipment. 100% stamp duty exemption. GIFT City IFSC offers 10 year tax holiday, zero GST, zero STT. Emerging as cost effective alternative to Tier 1 cities.
Up to 15% capital subsidy outside Mumbai and Pune. 75 to 100% stamp duty exemption in Tier 2/3 cities. Employment generation linked incentives for D+ category regions. MIDC IT Parks with ready infrastructure.
Up to 20% on investments. 100% stamp duty exemption in SIPCOT areas. Skill development subsidy per employee. TIDCO IT corridors with plug and play space availability.
Transfer pricing is the single most litigated area for GCCs in India. The difference between a defensible structure and an assessment proceeding is in the benchmarking methodology, documentation rigour, and intercompany agreement architecture established at inception.
Most common for software development services. Operating margin (OP/TC) as profit level indicator. Requires annual benchmarking study.
For routine support services. Simpler documentation. Risk of reclassification if service scope expands beyond routine.
Available for eligible IT/ITeS services. Reduces litigation risk. Subject to arm’s length validation by TPO.
4 to 5 year certainty. Bilateral APAs with treaty partners reduce double taxation risk. Processing time 18 to 24 months.
Under Section 115BAA, the concessional rate is 22% plus surcharge and cess, resulting in approximately 25.17%. For SEZ GCCs, 100% exemption applies for the first 5 years under Section 10AA.
100% income tax deduction for first 5 years, 50% for next 5 years under Section 10AA. Duty free imports, GST zero rating, and MAT exemption. Requires minimum export obligations and compliance.
100% income tax exemption for 10 of 15 years. Zero GST, stamp duty, and STT. Relaxed FEMA regulations. Best suited for financial services GCCs and entities with significant cross border flows.
TNMM is most common. Arm’s length range: 15 to 25% for development services. Cost plus at 10 to 15% for routine services. Safe harbour at 17 to 18% for eligible IT/ITeS. APAs provide 4 to 5 year certainty.
Karnataka: 25% capital subsidy, 100% stamp duty reimbursement. Telangana: 20% subsidy, 5 year employment incentives. Gujarat: GIFT City IFSC tax holiday. Maharashtra and Tamil Nadu: tier based incentives outside metros.
Export services are zero rated under GST. No GST charged on export invoices. Full ITC available on domestic procurement. SEZ units additionally enjoy GST exemption on intra-SEZ procurement.
Section 115BAA vs SEZ vs GIFT City. State incentive stacking. Transfer pricing benchmarks. Every election modelled before the structure is finalised.
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