Govt allows Parsvanath to pull ouf of 6 SEZ projects

The Board of Approvals for Special Economic Zones has given real estate major, Parsvanath group, the go-ahead to pull out of six SEZ projects.

Parsvnath had got in-principle approval for leather and handicrafts SEZs at Agra and Moradabad, respectively, a gems and jewellery tax-free zone in Jaipur, a food processing SEZ in Sonepat, an auto component zone in Pune and a multi-product SEZ in Kanceepuram.

The firm was among several realty firms that had sought the government's nod to shelve its SEZ porjects amid continued tax uncertainties it feared would crop up once the Direct Taxes code was in place. The other developers that had wanted to opt out were Juventus Builders and Developers, Alok Infrastructure, Oval Developers, Airmid Developers and NG Realty.

The draft DTC has proposed withdrawal of exemptions for new units that come up after the tax code is implemented and replacement of tax exemption on profits for developers with sops on investments.

The DTC is expected to implemented from the next fiscal.

The industry has also expressed concern over the imposition of Minimum Alternate Tax (MAT) of 18.5% on the book profits of SEZ developers and units.

Under the SEZ Act, SEZ units get 100% tax exemption on profits earned for the first five years, a 50% exemption for the next five years and another 50% exemption on re-invested profits in the following five years.
   
SEZ developers, on the other hand, get 100% tax exemption on profits for ten years, which they can choose in the block of the first fifteen years.
   
Five developers have approached the BoA to de-notify their tax-free enclaves.
   
In addition, as many as 45 SEZ developers, including Raheja SEZ, Navi Mumbai and GP Realtors, have sought more time to execute their projects.