Odisha exempts VAT on goods sold for SEZ works

Exemption also applicable to contractors and sub-contractors engaged by SEZ developer

Odisha government has exempted value added tax (VAT) on the goods sold for executing the works contract in Special Economic Zones (SEZs).

"In exercise of the powers of the Odisha Value Added Tax act, 2004, the state government having satisfied that it is necessary to do in the public interest, do hereby exempt the goods sold in course of execution of works contract to a developer, co-developer and units of a SEZ for carrying out authorized operations with in the processing areas of SEZ duly established in the state under SEZs Act, 2005 and the policy for SEZs-2015 issued in the resolution of the Government of Odisha in the industries department from payment of tax ", stated a finance department resolution.

The exemption of levy will also be applicable to contractors and sub-contractors engaged by the developer, co-developer and units of SEZ for carrying out the operations in the processing areas of SEZs. The VAT exemption will be applicable form the date of issue of eligibility certificate by investment promotion agency, Industrial Promotion and Investment Corporation of Odisha Ltd (Ipicol) in favour of the developer, co developer and units of SEZs.

The state government has allowed the exemption in line with the sops promised in the Odisha's SEZ policy. The policy aims to widen the state's investment horizon and attract more investors in sectors like information technology, biotechnology, electronics, automobiles and auto component manufacturing, ship building, gems and jewellery and pharmaceuticals.

As per the SEZ policy of the state, the import of goods and services made to SEZ units located within the processing zone from the domestic tariff area shall be exempted from VAT, entry tax, electricity duty and other cess payable on sales and transactions.

The notified SEZs in Odisha include Tata Steel's multi product SEZ at Gopalpur, Vedanta Ltd's sector specific SEZ (Jharsuguda), Saraf Agencies SEZ (Chhatrapur), Tata Consultancy Services (TCS) IT/ITes SEZ, Hindalco Industries SEZ (Sambalpur) and the Infovalley IT SEZ being developed by Odisha Industrial Infrastructure Development Corporation (Idco) on the outskirts of Bhubaneswar.