The commerce ministry is trying to ease norms for Special Economic Zones (SEZs) and make it simpler for units to exit these areas, union Minister Piyush Goyal said on Thursday.
The ministry is also looking at ways for partial de-recognition of existing SEZs so that areas which have no more demand can be used for industrial or other purposes.
“There are a large amount of areas lying across SEZs in the country. Now that the sunset clause (for SEZ tax incentives) has set in, probably we may not find enough traction for new people to set up units within SEZ, so we are trying to ease the system of SEZs going forward and make it easier for people to exit from the SEZ status,” the commerce and industry minister said.
He was interacting with exporters at SEEPZ (Santacruz Electronic Export Processing Zone), Mumbai.
He also said different issues raised by exporters are under consideration of the government.
Citing an example, he said the ministry is discussing with its finance counterpart the issues of allowing e-commerce seamlessly for artificial jewellery up to a value of USD 800 and depreciation of second hand goods.
“We are also discussing how the SEZs can play a more important role in the DTA (domestic tariff area) through an equalisation levy,” he added.
In the Budget 2016-17, the government had stated that the income tax benefits to new SEZ units would be available to only those units which commence activity before March 31, 2020.
SEZs, which emerged as major export hubs in the country, started losing their sheen after imposition of minimum alternate tax and introduction of sunset clause.
The units in SEZs used to enjoy 100 per cent income tax exemption on export income for the first five years, 50 per cent for the next five years and 50 per cent of the ploughed back export profit for another five years.
Talking about free trade agreements (FTAs), Goyal said: “I am trying to get more and more FTAs done with the UK, UAE, Australia, and the EU, to try and provide more market access for exporters.”
With the UAE, he said “I am fighting hard” to make sure that the gem and jewellery sector gets the 5 per cent duty concession that are currently charged in UAE, as part of the early harvest trade pact.
On India’s merchandise exports, he said the target of USD 400 billion by end of this fiscal year is “well on track so far”.
“We have a run rate of about USD 1.2 billion everyday that needs to be achieved,” he added.
Further, Goyal said the ministry is looking at Space Transfer Policy in SEEPZ, to make it easier for those who want to exit the area and get fair value for investments made in the unit.
“We are trying to introduce elements in the policy which will facilitate faster exit and will also make it easier for you to recover investments that you have made in that unit. We are trying to create a robust policy,” he added.
Separately, speaking at the inauguration of Centre of Excellence in Logistics and Supply Chain Management at NITIE in Mumbai, Goyal said managing supply chains is becoming more and more complex owing to the challenges posed by global competitiveness and economic crisis.
In this scenario, the Centre will contribute to cutting-edge research, knowledge-building and capacity building in logistics and supply chain management, through applied research and development activities, he said.
“There is huge potential in industrial engineering, you can transform the future of this country by the work you are doing. A lot of industrial engineering also goes into sectors such as restaurant design and operations, e-commerce businesses and delivery of public services as well,” the minister added.