GIFT City, India’s pioneering smart city, emerges at the intersection of global finance and technology, serving as the gateway to international financial markets. With a visionary mission to establish itself as a leading global hub, GIFT City focuses on driving comprehensive reforms and providing top-tier infrastructure for financial institutions. As a project of national significance, it plays a pivotal role in India’s growth narrative. This introduction offers a glimpse into the transformative landscape of GIFT City, where innovation, sustainability, and world-class facilities converge to redefine India’s position in the global financial arena.
VISION & MISSION
The vision of GIFT City is to become a leading global financial and technology hub. It aims to drive reforms towards providing a thriving financial ecosystem critical to support and expand businesses.
The mission of GIFT City is to offer top-notch infrastructure and services tailored for financial institutions and companies involved in banking, insurance, capital markets, and asset management. It is poised to become a hub of excellence and take on the money centers of the continent.
GIFT City is a project of national importance and has become an integral part of India’s growth story as the country marches towards realizing the dream of becoming a developed nation.
Let’s look into the objectives of GIFT City:
1. World-Class Zone: The core objective of GIFT City is to develop a world-class zone for the long-term provision of office/service accommodation and high technological, economic, and commercial infrastructure².
2. Financial and Technological Hub: GIFT City is positioned as a financial and technological hub designed to cater to customers outside the Indian jurisdiction².
3. Infrastructure: GIFT City offers state-of-the-art connectivity, infrastructure, and transportation access².
4. Regulatory Framework: Entities operating in GIFT City have access to a regulatory framework, a business-friendly environment, tax exemptions, cross-border transaction services, and currency conversion facilities.
5. Financial Services: GIFT City hosts banking units of Indian and foreign banks, capital market solutions, and other financial services.
Overview of Gujarat International Finance Tech-City
The GIFT City’s plan is for the 359 hectares (886 acres) of land area to have approximately 110 buildings with 62,000,000 sq ft of built-up area, of which around 67% is commercial, 22% is for residential, and 11% is social facilities. Currently, 2,000,000 sq ft of commercial space is operational, and another 3,000,000 sq ft is under development.
The proposed utilities for the city are as follows:
1. Electricity: A 400 MV electrical supply line is proposed to be laid which will reduce the chances of power outages. The cables will be laid in a utility tunnel consisting of thick concrete walls in redundant paths.
2. Telecommunication Services: GIFT City will have state-of-the-art telecommunications systems that will be based on the concept of FTTX (Fiber to home/office). The communications lines will be laid in fault-tolerant rich architecture to ensure maximum uptime of services.
3. Piped gas: Natural gas is distributed to every house and building via pipes, which is cheaper and safer than cylinders. Gas supply to the city is done from the existing gas network of the state-owned company for gas transmission pipelines. Piped natural gas is already in distribution in the nearby cities of Ahmedabad and Gandhinagar.
4. Solid waste management: All waste in the city is collected and taken to the processing plant by vacuum chutes installed on every floor of all buildings. The waste is automatically sucked through underground chutes at a high speed of 90 km/h and is being treated through various methods including plasma gasification.
5. Transportation: Transportation in GIFT City will consist of the following:
Let now look into the tax benefits of Gift IFSC (International Finance Service Centre)
GIFT IFSC aspires to become India’s gateway for inbound and outbound requirements of international financial services. Ministry of Finance, Government of India provided a new initiative for undertaking international financial services business in India.
The regulators namely the Reserve Bank of India (RBI), Securities & Exchange Board of India (SEBI), and Insurance Regulatory & Development Authority of India (IRDAI) issued regulations allowing Indian and foreign institutions to open their office in the IFSC.
Benefits of IFSC:
1. Income tax exemption: There is a 100% tax exemption for 10 consecutive years out of 15 years. Surcharge and health and education cess are not applicable on certain incomes earned by specified funds in the IFSC.
2. Goods and Services Tax exemption: No GST on services: (i) received by unit in IFSC. (ii) provided to IFSC / SEZ units and offshore clients. GST applies to services provided to Domestic Tariff Areas.
3. Stamp Duty Exemption: There is an exemption on stamp duty.
4. No Withholding Tax (TDS): There is no withholding tax on interest payable to a non-resident by an IFSC unit on overseas borrowings.
5. Reduced Withholding Tax: Interest on Long Term Bonds and Rupee Denominated Bonds listed only on a recognized stock exchange in IFSC: (1) Issuance before 01 July 2023 – Taxable at a lower rate of 4% (2) Issuance on or after 01 July 2023 – Taxable at a rate of 9%.
What is GIFT City SEZ?
Gift City’s role in elevating India’s Startup Ecosystem
GIFT City provides startups with access to a variety of funding options, as well as a business-friendly environment that prioritizes innovation.
Its advantageous location promotes partnerships and collaborations while also ensuring a constant flow of skilled professionals due to its proximity to multiple talent pools.
From a tax standpoint, startups can avail themselves of a 100% tax exemption for any 10 years out of a 15-year period. Additionally, the Minimum Alternate Tax (MAT) for companies, or the Alternate Minimum Tax (AMT) for others set up as a unit in the IFSC, is set at a competitive rate of 9% of book profits.
GIFT City stands as a beacon of innovation and financial prowess, attracting startups from finance sectors to leverage its unique offerings.
With its unparalleled infrastructure, favourable tax regime, and robust regulatory framework, GIFT City is poised to play a pivotal role in nurturing and propelling India’s startup ecosystem to new heights.
GIFT City is a major step towards establishing India as a global financial services hub, boosting its competitiveness in the global market. It’s a symbol of India’s progress in creating world-class infrastructure and promoting financial and technological growth. It’s a benchmark for smart cities in India and sets an international standard for finance and technology hubs worldwide..
GIFT City is a shining example of innovation and growth, paving the way for a new era of economic development in India. It is a testament to the country’s potential and symbolizes its bright future.