'MAT & DDT dented investor friendly image of SEZs'

The minimum alternate tax and the dividend distribution tax on SEZs have dented the investor friendly image of these special zones, an exports promotion body said today.
The issue was discussed during a meeting between Minister of State for Commerce and Industry EMS Natchiappan and members of the Export Promotion Council for EoUs and SEZs (EPCES).
The EPCES said that issues such as "imposition of MAT, non-refund of special additional duty has dented the investor friendly image of special economic zones (SEZs) and created uncertainty in the minds of foreign investors, SEZ developers and units".
Natchiappan reviewed the performance of SEZs and exports-orinedted units (EoUs) and discussed measures which can be announced in the forthcoming Foreign Trade Policy to revive investor interest, EPCES said in a statement.

The Minister said that there are certain policies and operational frameworks in addition to state-level issues which need immediate consideration, according to the statement.
In 2011, the government had imposed MAT of 18.5 per cent on the book profits of special economic zone developers and units.

Although the government has recently announced an incentive package to revive these zones, several developers are surrendering their projects due to the imposition of the taxes.
During 2012-13, SEZs have attracted a total of Rs 2.36 lakh crore investment and provided direct employment opportunities to over 11 lakh people.
Exports from special economic zones grew by about 31 per cent year-on-year to Rs 4.76 lakh crore during 2012-13.