Commerce ministry seeks views on SEZs

Written by fe Bureau | New Delhi | Updated: Oct 29 2011, 07:15am hrs
To address the declining investor confidence in the special economic zones (SEZs), the commerce ministry has sought stakeholders views on how to revitalise SEZs. The move comes in the wake of many SEZ developers seeking to denotify the zones and the concerns over the Direct Taxes Code revoking the tax exemptions for these zones. Over 200 SEZ developers have already been given more time to execute their projects by the Board of Approval.

The government foresees global slowdown to hit the exports. If SEZs lose tax benefits, then the problems would be compouded. The ministry has initiated the dialogue with stakeholders to know how to revitalise the SEZs. Currently, SEZs contribute around 28% to the country's exports, amounting to over R3 lakh crore and providing direct employment to over 7 lakh people. As of now, the country has 143 zones exporting out of 585 zones approved with total investment of over R2 lakh crore.

Sources further added that the ministry was also in the process of preparing a discussion paper that will include various issues like apprehensions over tax exemptions and the minimum land requirements.

Besides, the industry has also expressed concern over the imposition of MAT of 18.5% on the book profits of SEZ developers and units. Commerce secretary Rahul Khullar had earlier told FE that he would be proposing a differential MAT rate for SEZs to the finance ministry.