Revenue dept objects to SEZ status for Infy's Chandigarh unit

The Union Commerce Ministry and revenue department are at loggerheads over the approval to Infosys' campus as a special economic zone (SEZ) unit in Chandigarh SEZ. 

The revenue department, say sources close to the development, has demanded the withdrawal of SEZ status to Infosys' campus at the Chandigarh Technology Park SEZ alleging that the company's structures were in place prior to it securing the SEZ status. Only vacant sites, according to SEZ norms, are being accorded SEZ status. 

However, Infosys said the commerce ministry had given the approval after a thorough inspection by the SEZ board. "It was completely a new campus. It's only after the approval that we started exporting from there. Till that time, we had not availed of any benefit under the SEZ norms," T V Mohandas Pai, Head-HR and administration, Infosys told Business Standard. 

Sources in Infosys, however, said the work for its Chandigarh campus had started before the SEZ rule came into force. Subsequently, the Chandigarh Administration developing the SEZ made a formal application to the government requesting to recognise Infosys unit as an SEZ. In their application, the Chandigarh administration made it clear that though work on the Infosys campus has already begun, it is a completely new campus. 

Meanwhile, the commerce department, which issued the letter recognising Infosys campus as an SEZ unit, is understood to have raised objections made by the revenue department. Infosys officials are reportedly meeting the Commerce Secretary on Thursday to discuss the matter. 

Infosys SEZ unit in Chandigarh has a capacity of close to 5,500 people and is nearly fully-occupied now. Infosys is understood to have spent about Rs 100 crore on the campus