The government is likely to announce new norms to revive special economic zones (SEZs) by the end of next month, which have lost attraction after imposition of certain levies which took away tax incentives.
Anand Sharma, Minister for Commerce & industry, said, "In a month's time, that is by January end you can expect the revised or the new SEZ guidelines which will definitely be a positive mood booster for the investors.”
The government had imposed Minimum Alternative Tax (MAT) and Dividend Distribution Tax (DDT) on SEZs in 2010-11, which were earlier exempted from almost all levies. Due to imposition of these levies, there has been a slowdown in growth of export from SEZs.
"When the decision to bring in MAT was there, I had personal reservations. We had urged for reconsideration because it was meant to align with the DTC but that did not happen," Sharma said.
He added that the levies should not have been imposed as the predictability of a policy regime is essential to assure investors, both domestic and foreign, that when they invest money under the government policy which has the endorsement of Parliament there will be stability.
Also Read
The Direct Taxes Code (DTC) being considered by Parliament proposes to do away with the income tax exemption given to SEZs and instead link tax sops to investments made in them. Profit-linked benefits were the main attraction of the SEZ scheme.
According to sources, the government is considering to relax minimum land area requirement for different categories of SEZ, besides extending the benefits of export schemes to SEZ units that are already available to entities outside the zone.
Exports from special economic zones (SEZs) grew by 36% year-on-year to Rs 2,39, 000 crore during the April-September this financial year. Overseas shipments from SEZs stood at Rs 3,00,000 crore in 2011-12.
