IFSCA SEZ Compliance FAQ v2.0 Clarifies LOA, Commencement, IEC and Portal Rules for GIFT IFSC Units

IFSCA has published SEZ Compliance FAQs Booklet v2.0, dated August 20, 2026, giving GIFT IFSC units updated operational guidance on the Letter of Approval (LOA), commencement, lease documentation, Importer Exporter Code (IEC), authorised services and SEZ Online procedures.

The booklet explains a fundamental point for compliance teams: every IFSC unit approved, licensed, registered or authorised by IFSCA is also an SEZ unit and must comply with the SEZ Act and SEZ Rules. It states that the SEZ Letter of Approval must be obtained before the corresponding IFSCA approval.

UAC and SEZ Online process

The Administrator (IFSCA) exercises Development Commissioner powers for IFSC units under Section 12(7) of the SEZ Act. The FAQs say the Unit Approval Committee normally meets weekly in hybrid mode. Applications are scrutinised for deficiencies in SEZ Online before agenda placement, and complete applications missing the notified cut-off normally move to the next UAC meeting.

LOA validity and commencement

An LOA is initially valid for one year from issue for commencement of authorised operations. Once commencement is properly taken on record, it is valid for five years from the date of commencement, subject to renewal requirements.

The FAQs make an important procedural distinction: merely submitting a commencement intimation does not extend the LOA. Commencement must be taken on record by the Administrator in SEZ Online. The prescribed route is Free Form-Unit - Intimation of DCP, supported by proof of commencement, the IFSCA authorisation or registration and the registered lease deed in a single PDF. Physical or email submissions are not entertained for this process.

The booklet says commencement will not be taken on record without a registered lease deed. It also notes that while the first invoice may commonly evidence commencement, activity-specific measures can apply to businesses such as funds and broker-dealers.

Expired LOA affects invoicing

IFSCA's guidance says a unit with an expired LOA must not raise invoices or receive payments. Units are advised to apply for extension at least one month before expiry. If a complete commencement intimation was filed before expiry but taken on record later, a separate extension is not required merely because administrative recording happened later. If the intimation itself is filed after expiry, the validity issue must first be addressed.

IEC is mandatory

The booklet states that all GIFT IFSC units must obtain an Importer Exporter Code from DGFT and update it in SEZ Online through the prescribed free-form application. This requirement is relevant even to service-oriented entities that may not view themselves as conventional importers or exporters.

Authorised services and premises changes

For broadbanding or adding a new or changed service, the FAQs say the activity should first be included in the authorised operations under the LOA before the corresponding IFSCA regulatory approval is obtained. This makes sequencing important: SEZ and regulatory workstreams should be reconciled before launch.

For premises deletion, the cancelled lease deed should be submitted within 30 days, and the unit must vacate the deleted premises immediately and in any event within the stated 30-day period.

Compliance checklist

- Maintain an LOA calendar covering issue, commencement, recording, expiry and renewal dates.

- Reconcile SEZ and IFSCA permissions whenever an activity is added or changed.

- Control lease documents because a registered lease is integral to commencement recording.

- Check portal status, not only submission receipts. Filing a request is not always equivalent to approval or recording.

- Keep IEC and entity records current in SEZ Online.

For CAs, company secretaries, controllers and compliance teams in GIFT IFSC, the updated FAQs show that SEZ compliance is not a background formality. LOA validity, commencement recording, lease documents, IEC and authorised-operation changes can directly affect the unit's ability to operate and bill. A calendar-based control, reconciled with IFSCA approvals, is the practical response.

Key takeaway

Current official 2026 reference document with numerous operational rules and high evergreen-with-current-update search utility for GIFT IFSC compliance professionals.