The International Financial Service Centre (IFSC) at Gift City, Gujarat has received a major boost with the Finance Minister proposing a unified regulator for the special finance zone along with tax benefits for non-residents and non-corporate entities operating there.
“International Financial Service Centre (IFSC) at Gift City, which has become operational, needs a coherent and integrated regulatory framework to fully develop and to compete with other offshore financial centres. The government will establish a unified authority for regulating all financial services in IFSCs in India,” said Arun Jaitley, Finance Minister, while presenting Union Budget 2018-19.
This assumes significance as various government agencies and regulators, including the Reserve Bank of India and Securities and Exchange Board of India (SEBI), have oversight on entities that operate in the zone.
Incidentally, entities operating at Gift City have, in the past, reiterated the need for a unified regulator for single window clearance and ease of doing business.
“The announcement of setting up of unified regulator for IFSC in India would help India achieve its full potential in the global financial markets. Globally, most of the financial centres host unified regulator in the same centre,” said Ajay Pandey, MD & Group CEO, GIFT City, adding the decision would help in establishing GIFT IFSC as a global financial hub.
Mr. Jaitley also said transactions done on exchanges based in Gift City would be exempted from short term and long term capital gains tax.
“to promote trade in stock exchanges located in IFSC, I propose to exempt transfer of derivatives and certain securities by non-residents from capital gains tax. Further, non-corporate taxpayers operating in IFSC shall be charged Alternate Minimum Tax (AMT) at concessional rate of 9% at par with Minimum Alternate Tax (MAT) applicable for corporates,” said Mr. Jaitley.
