SEZs in Goa unlikely to be denotified

Even as the inter-ministerial Board of Approval for Special Economic Zones (SEZs) cleared an application by realty major DLF to ‘denotify’ one of its zones in New Delhi, the same cannot be done for three notified SEZs in Goa, government officials said.

“Denotification of the Goa zones is not possible,” a commerce ministry official said, adding: “DLF is the only developer with a notified SEZ that has asked for scrapping the zone.”

The government has notified more than 270 SEZs in the country. Notification is the final nod from the government that SEZ developers need to become eligible for tax benefits for developing the zones.

Earlier this year, the Goa government recommended the dissolution of all SEZs in the state, which included the three notified zones developed by Meditab Specialities Private Ltd (123.2 hectares), Peninsula Pharma Research Centre Pvt Ltd (20.36 hectares) and K Raheja Corp Pvt Ltd (106 hectares), against the backdrop of mass protests over the tax-free industrial enclaves.

Officials added that development activities in these three notified zones in Goa were at an advanced stage. Moreover, units in these zones had imported duty-free machinery. “Under such circumstances, denotification is not possible. Moreover, it is the state government which is recommending the denotification and not the developers,” an official said.

DLF had approached the board, headed by Commerce Secretary Gopal K Pillai, to denotify a 10-hectare information technology zone at Shivaji Marg, New Delhi. The board accepted the application. “The company approached the board as it could not find companies to buy space in the notified zone. Moreover, the land is lying vacant with no construction activity on it,” a commerce ministry official said.

Officials maintain that the board has the discretionary power to denotify an SEZ when the developer tells it that it is unable to develop the zone and that the construction activity has not started there.

In the past few months, many zones have found it difficult to access credit from financial institutions and banks, thanks to the current global financial crisis.