TL;DR: Neither STPI registration nor an SEZ unit gives a new Global Capability Centre (GCC) in India an income tax holiday, so the choice turns on GST cash flow, location and compliance load. STPI registration suits most new GCCs because it carries lighter compliance and no location restriction, while an SEZ unit pays off when zero-rated GST on large domestic inputs such as rent and fit-out outweighs being tied to a notified zone. A GCC should fix its registration before signing a lease, because the lease usually decides the registration by default.
STPI registration and SEZ status are two separate export regimes
A Global Capability Centre is an offshore unit that a multinational owns and runs to deliver technology, operations, finance or analytics work for its own group. Most GCCs in India bill that work to a parent or affiliate abroad, which makes them exporters of services and puts two registration regimes on the table.
STPI registration is the enrolment of a software or IT-enabled services export unit with Software Technology Parks of India (STPI), a society under the Ministry of Electronics and Information Technology. The registered unit can sit in any office the company leases.
An SEZ unit is a business approved to operate inside a notified Special Economic Zone (SEZ) under the Special Economic Zones Act, 2005, which treats the zone as outside India’s customs territory for authorised operations. Once approved, the unit operates under the zone’s own rules rather than the ones that govern an ordinary office.
IT and professional services sit inside a group that is growing faster than services overall. On a real gross value added (GVA) basis, financial, real estate, IT and professional services grew 12.1% in Q1 2026-27, against 10.0% for the tertiary sector as a whole, according to a PIB factsheet citing MoSPI estimates.
Neither registration gives a new GCC an income tax holiday
Any GCC briefing deck listing an SEZ income tax holiday for a new unit is out of date. Section 10AA of the Income-tax Act, 1961 gave eligible SEZ units a deduction of 100% of export profits for five years, 50% for the next five, and up to 50% for a further five years against profits reinvested in the business. That deduction is closed to new units, which is why it no longer belongs in a new GCC’s business case.
STPI units had their own holiday under Section 10A, which lapsed after the 2010-11 financial year. On income tax, a new STPI unit and a new SEZ unit therefore start from the same position. A GCC registering in India today chooses between STPI and SEZ on indirect tax, location and compliance, not on income tax.
For a captive GCC paid on a cost-plus basis, taxable profit is the markup the parent pays over cost, and transfer pricing rules set that markup whichever registration the GCC holds. Section numbers in older tax memos are worth checking against the statute currently in force before anyone relies on them.
SEZ units that began operations before the 2020 sunset are a different case. A unit still inside its deduction window carries a real tax asset, and an acquirer should have a tax adviser confirm how much of it survives the deal.
Zero-rated GST is the main financial advantage an SEZ unit keeps
Indirect tax is where SEZ status still changes the numbers for a new GCC. The mechanism is zero-rating, which reaches each scheme at a different point.
- Zero-rated supply
- a supply taxed at an effective GST rate of zero, where the supplier either charges no tax or recovers the tax it paid.
An SEZ unit receives domestic goods and services as zero-rated supplies, so its landlord, facility managers and IT vendors can invoice without GST once the paperwork is in place. STPI units pay GST on the same inputs and recover it through refunds linked to their own zero-rated exports of services. Both routes can end at a similar cost, but the STPI route funds the tax for the length of the refund cycle.
Take a 400-seat GCC leasing a full campus. Rent, fit-out, facility management and security are typically its largest domestic costs. Inside an SEZ those invoices arrive zero-rated, while an STPI unit carries the tax until each refund lands. For a new GCC, the GST difference between STPI and SEZ is a working capital cost rather than a permanent one, and it is usually the largest financial gap between the two schemes.
We do not publish numbers we cannot attribute, and no single percentage captures the SEZ advantage. The advantage scales with each GCC’s domestic spend and with how reliably its refunds arrive.
Customs benefits look larger on a term sheet than in practice for most GCCs. A GCC that buys laptops locally and runs its workloads on cloud capacity billed from abroad imports little, so customs barely moves its case under either scheme.
How the compliance load compares, side by side
The compliance gap between the two schemes is wider than the tax gap. Net Foreign Exchange (NFE) is the test of whether a unit earns more foreign exchange than it spends over a defined period, and both schemes expect a positive result.
| Dimension | STPI unit | SEZ unit |
|---|---|---|
| Where the GCC can sit | Any premises the company chooses and registers | Only inside a notified SEZ, typically an IT or IT-enabled services zone |
| Income tax holiday for a new unit | None, since Section 10A lapsed after 2010-11 | None, since Section 10AA covers only units that started by 31 March 2020 |
| GST on domestic inputs | Paid, then refunded against exports of services | Received as zero-rated supplies |
| Foreign exchange test | Positive NFE under the Foreign Trade Policy | Positive NFE under the SEZ Rules, calculated cumulatively over five years |
| Who supervises | STPI, through periodic progress and performance reports | The Development Commissioner, through annual performance reports and approvals for changes |
| Supplying Indian group companies | Allowed within limits set by the Foreign Trade Policy | Allowed, with domestic supplies taxed and tracked separately |
| Exit | De-bonding, with duty settled on capital goods imported duty-free, and no move required | Exit approval, duty on capital goods and usually a move out of the zone |
For a captive GCC whose parent pays every invoice in foreign currency, staying NFE-positive is rarely the hard part. The burden is the tracking and the filings, which need a named owner from go-live.
Location and exit decide more GCC registrations than tax does
An SEZ unit cannot exist outside a notified zone, so choosing SEZ status shrinks the lease shortlist to SEZ-designated buildings in the target city. STPI registration attaches to the premises the company picks, which leaves the GCC free to take the campus its leadership prefers. A faster route to GST neutrality seldom justifies a building that fails on commute, expansion room or talent catchment.
By operational capacity, India is the third-largest data centre market in APAC, according to .
Infrastructure also pulls on city choice, especially for GCCs running AI or data-heavy engineering work. Cushman & Wakefield’s H1 2026 figures count nearly 3.9 GW of under-construction and planned data centre capacity in India, and part of that pipeline is still at the planning stage. A GCC that needs to sit near a particular cluster should confirm that SEZ-designated office space exists in that micro-market before building its business case on SEZ economics.
Exit is the cost most GCC business cases leave out. An SEZ unit that wants to leave the zone or convert to a domestic operation usually has to vacate its building, because the premises sit inside the zone. An STPI unit that exits keeps its offices.
Build-Operate-Transfer (BOT) is a GCC model in which a provider sets up and runs the centre, then hands the entity, people and assets to the client. Under BOT, the registration, the NFE record and any outstanding obligations belong in the contract from signing. Astravise works both sides of BOT deals and puts the registration on the same list as valuation and employee transfer terms.
A four-step test to run before choosing STPI or SEZ
Astravise is model-agnostic by design, and neither scheme starts as the default in this test. The order matters, because an early step can settle the comparison before the later ones are needed.
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Confirm that the GCC’s output counts as an export of services. Both schemes rest on that status, so a tax adviser should confirm it against the current GST conditions before anything else. A GCC that will also serve Indian affiliates needs that domestic work mapped first, because it changes the arithmetic under both regimes.
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Model three years of GST cash flow under each scheme. Set the domestic input spend (rent, fit-out, facilities and local IT services) against a realistic refund cycle for an STPI unit and against zero-rated procurement inside an SEZ. The output is a working capital figure the CFO can weigh against the building shortlist and every other step on this list.
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Price the exit on the day you enter. For an SEZ unit, write down the duty on capital goods, the approval steps and the cost of moving out of the zone; for an STPI unit, list the duty on capital goods imported duty-free. Under a BOT model, add the cost and timing of moving the registration with the entity.
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Name an owner for the compliance calendar. An SEZ unit needs someone tracking NFE, filing performance reports and handling Development Commissioner correspondence, while an STPI unit needs its NFE and STPI reporting kept current. Load both sets of dates into the GCC’s calendar before go-live rather than after the first notice arrives.
Sources
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Factsheet Details:Factsheet Details | PIB (Press Information Bureau (PIB), Government of India, 2026-09-01)
Frequently asked questions about STPI and SEZ for GCCs
- Does a new SEZ unit still get an income tax holiday in India?
- No, a new SEZ unit in India does not get an income tax holiday. The Section 10AA deduction under the Income-tax Act, 1961 applied only to SEZ units that began operations on or before 31 March 2020. SEZ units that started before that date can still claim the deduction for whatever remains of their eligible years.
- Is STPI registration mandatory for a GCC in India?
- Whether a GCC in India needs STPI registration depends on what the GCC imports and how it documents its exports of services. STPI registration adds most value to a GCC that imports capital goods duty-free or needs STPI’s export certification, so a centre that buys little hardware abroad gains less from STPI registration.
- Which is better for a GCC, STPI or SEZ?
- STPI registration suits most new GCCs better, because STPI carries lighter compliance and no location restriction while matching an SEZ unit on income tax. An SEZ unit is the better choice when zero-rated GST on large domestic inputs, such as rent and fit-out, is worth more than the lease flexibility and exit freedom the GCC gives up.
- What compliance does an SEZ unit have to keep up?
- An SEZ unit has to stay a positive net foreign exchange earner, file annual performance reports with the zone’s Development Commissioner and seek approval for changes such as new services, expansion or exit. SEZ compliance lasts for the life of the unit, so a GCC should give SEZ compliance a named owner from go-live.
- Can a GCC move out of an SEZ later?
- A GCC can move out of an SEZ, but the SEZ unit needs exit approval, must pay the duty forgone on capital goods and usually has to vacate premises that sit inside the zone. That SEZ exit cost belongs in the original business case, because the exit cost grows with every capital item the GCC acquires duty-free inside the zone.
- Which Indian city has the largest data centre market?
- Mumbai is India’s largest data centre market, according to Cushman & Wakefield’s India Data Centre Market H1 2026 update, with Hyderabad, Chennai and Delhi NCR as major secondary markets and Visakhapatnam emerging for AI-focused investment. A GCC weighing SEZ status in any of these cities should check that SEZ office space exists near the infrastructure it needs.
Choose the registration before the lease is signed
The cheapest moment to choose between STPI registration and an SEZ unit is before the lease and the entity are signed, while every option is still open. Talk to Astravise about your GCC registration and bring your lease shortlist and draft business case, so the GST, location and exit numbers are run against real buildings.