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Government should promote special economic zones (SEZs) and make them attractive for investors in order to give a boost to country's exports, industry body Assocham said here today.
"Considering that till date, only 44% of notified SEZs have reached operational stage and number of new proposals fell drastically, together with demand by developers, a serious government effort is required to keep SEZs attractive," Assocham said in a letter to Commerce and Industry Minister Anand Sharma.
Suggesting measures to make SEZs alluring for investors, Assocham said the government must do away with Form A-2 and allow exemption for specified services used in authorised operations of SEZs, thereby reducing the time consumed in the entire process.
In Maharashtra, SEZ developers and units are liable to pay value added tax (VAT) on indigenous procurements for authorised operations as well as on local sales of finished goods, while in various states VAT is exempted on both procurement and domestic tariff area (DTA) sales, it said in the letter.
"Ministry of Commerce should take up this matter with Maharashtra government for granting exemption from payment of VAT in state both for authorised operations in processing as well as non-processing area," Assocham said.
The chamber also urged the Commerce Ministry to provide customs duty exemption for operation and maintenance vis-a-vis authorised operations in non-processing area.
"Social and commercial infrastructure together with recreational facilities in non-processing area is of utmost significance to provide support to processing area activities and employees. However, currently exemption from taxes and duties is only for initial establishment of these infrastructure facilities," Assocham said in the letter.
It also suggested that minimum built up processing area condition of five hectares (Ha) and 10 Ha SEZ be waived or modified suitably for information technology (IT) and information technology enabled services (ITES) sector.
