With the BJP-led government at the Centre, focus on special economic zones (SEZs) is back. The commerce and industry ministry is all set to seek restoration of tax exemptions enjoyed by the SEZs earlier.
A senior government official told The Indian Express that the ministry is working on reviving the sector, wherein exports from IT SEZs alone in FY13 exceeded Rs 1.40 lakh crore, up 70 per cent year-on-year as per the commerce ministry. The ministry will seek the removal of minimum alternate tax (MAT) and dividend distribution tax (DDT) that was imposed on SEZ developers and units in FY12.
The ministry believes that move will give a huge push to India?s exports and manufacturing, which is the main thrust of the BJP-led government. Betting big on the manufacturing sector, the BJP in its manifesto has clearly spelled its plans to make India a manufacturing hub to bridge the demand-supply gap, create millions of jobs and increase the revenue for government.
As per the government data, there are currently 576 SEZs which have received formal approval while 49 have received in-principle approval. There are 175 operational exporting SEZs in the country with Gujarat, Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh having a significant number of SEZs.
Beginning with a modest Rs 13,854 crore in FY04, the exports from functional SEZs grew to Rs 2,20,711.39 crore, registering a growth of 121.40 per cent in FY10.
Last year, the ministry came out with a revamped SEZ policy, but got little interest from developers due to the lack of fiscal incentives.