No tax sops for port-turned SEZs

New Delhi, May 30 | Updated: May 31 2007, 05:30am hrs
The government will not provide any fiscal benefits, duty concessions and exemptions to material needed for operation and maintenance of existing ports converted to SEZs.

This forms a part of the latest guidelines for port-based SEZs. It would initially be applicable to existing port-based SEZ facilities like Gujarat's Adani Port, Balaji Infra Projects in Raigad etc. However, materials used for expanding the existing port or for building additional infrastructure like container facility etc would be eligible for duty concessions and exemptions.

Also, as part of tight security measures and for stricter customs monitoring, the the board of approval (BoA) decided that in case a developer proposes to build more than one entry or exit points in the SEZ, such details would have to be submitted to the approval committee and a requisite approval sought.

For IT/ITES and biotechnology SEZs, the power to decide the manner of fencing and the number of entry and exit points has been given to Development Commissioners, who would then have to inform the BoA about these decisions.

In addition, the BoA has asked the development commissioners and approval committees that regarding the materials needed for the construction of housing in the SEZ, they should see to it that not more than 20% of the approved housing is created in the first phase of development of the SEZ.

The BoA said SEZ developers can be given tax benefits to build social infrastructure only if those are occupied and used by the employees of the SEZ.

It said only after ensuring that the housing facilities and processing area (as created in the first phase) has been occupied by the SEZ employees requisite personnel, can the stocks and materials needed be cleared at 20% per phase basis.

These guidelines were formulated after various issues were raised by the revenue department recently on the customs clearances necessary for the ships docking at ports and other administrative functions.

According to the BoA has said the present administrative functions will continue till May 31, 2008. In the meantime, a committee comprising members from the revenue and commere ministries will be constituted to finalise suggestions pertaining to administrative structures relating to port functions by October 31, 2007.