SEZ investors' interest will be protected: Sharma

After meeting Finance Minister Pranab Mukherjee today on the proposal to stop tax sops to new SEZ units, Commerce and Industry Minister Anand Sharma said investors will be protected to the "best extent".

"We will see that to the best extent possible, interest of investors will be protected," Sharma told reporters after the meeting.

The revised Draft Tax Code (DTC), released on June 15 by the Finance Ministry, proposes to do away with the income tax benefits given to new units in Special Economic Zones (SEZ).

The SEZs have attracted an investment of about Rs 1.5 lakh crore. Of the 578 approved SEZs, 111 are operational.

The proposal has upset not only the industry, but also the Commerce Ministry.

"There have been some shared concerns, which have been discussed... We had very productive discussion. Whatever solution is there, (it) will be fair," Sharma said, adding, however, that the DTC would be a draft legislation which would go to Parliament. "Beyond that, I am not in a position to state anything," the minister said.

With the tax code proposing to stop incentives to Special Economic Zones, a government panel on SEZs has received just three new proposals for its next meeting on July 13.

Units in SEZs get 100 per cent income tax exemption on export income for the first five years and 50 per cent for the next five years. They also get exemption on 50 per cent of the ploughed back export profit for the next five years after the first 10 years. They are exempted from MAT as well.