Amidst investment slowdown and liquidity crunch faced by developers and units, the Centre has decided to give some breather to Special Economic Zones (SEZ) regarding their export obligations.
This is after noting that exports from SEZs are likely to miss their 2008-09 target of Rs 1 lakh crore. Till December 2008, exports from SEZs were Rs 70,000 crore.
The government would soon allow gems and jewellery and some other manufacturing sectors which have units in SEZs to sell up to a quarter of their production to the domestic tariff area (DTA or the area outside SEZs where normal taxes and duties are applicable) by paying only a concessional duty. This means they will not have to pay any import duty on value addition, which they would have had to pay in the normal course. Sales to DTA will be allowed on the condition that it does not harm the domestic manufacturers. Currently, SEZ units have to pay full customs duty, including on value addition, on sales to DTA units.
?This is to give them a kind of cushion in this crucial time. The sale in DTA from SEZs will be based on some duty foregone concept, that is they have to pay concessional. They have to pay duty for the material they import,? the official said.
The government also granted its approval to10 proposals for setting up SEZs, including a multi-services tax-free enclave by Navi Mumbai SEZ Pvt Ltd promoted by Mukesh Ambani?s close aide.
The commerce ministry has observed that although in the past three months, investments into SEZs have slowed down, they have not stopped altogether. For instance, J P Morgan has invested Rs 160 crore in Canton Buildwell SEZ project, official sources said.
The ministry expects 40,000 new jobs in the IT SEZs in the next four months and another 25,000 new jobs in the manufacturing SEZ by April.
