SEZ developers seek exemption from MAT

SEZ developers and units today asked the government to remove minimum alternate tax (MAT) saying the levy was hurting investment in the special economic zones.
The issue was raised during a stakeholders meeting convened by the Commerce Ministry here. The meeting was chaired by Commerce Secretary Rita Teaotia.
"Everybody flagged the issue of Minimum Alternate Tax (MAT). Industry representatives want the government to resolve the tax issue. They also asked the Centre to facilitate approval process in states," an official said.
The industry also wants proper functioning of the single window clearance mechanism in states as it takes lot of time to get approvals and clearances from different state authorities.

Other issues such as timely refund of value addition tax in states and need to simplify guidelines for refund of service tax were also raised by the developers.
Export Promotion Council for EOUs and SEZs Vice Chairman Rahul Gupta, who attended the meeting, said the Commerce Secretary indicated that the government would soon take a decision on the issues raised in the meeting.

"Industry mainly raised the MAT issue. It is hurting the SEZs," Gupta said.
Officials from Revenue Department, Central Board of Excise and Customs and some Chief Secretaries of states attended the meeting along with other private sector players.

SEZs, which emerged as major export hubs in the country, started losing sheen after the imposition of MAT. Industry has sought a reduction or removal of the levy to boost exports and investments.
Exports from these zones declined to Rs 4.63 lakh crore in 2014-15 from Rs 4.94 lakh crore in 2013-14.
The meeting assumes significance as the Commerce Ministry is struggling to arrest fall in exports in recent months.
Also, outward shipments in the last four fiscals have been hovering around USD 300 billion.
At present, 202 zones are exporting in the country. Government has accorded formal approval to 416 proposals, of which 330 SEZs have been notified.