Listing out reasons for the poor performance of the SEZ scheme, the CAG has said units operating in special economic zones pay higher taxes then their counterparts in the domestic tariff area.
As per CAG's calculation, a company during assessment year 2012-13 would have paid 32.44 per cent tax while the same unit in the SEZ would have been taxed at an effective rate of 37 per cent.
"...(this) may partially answer the question regarding reasons for many units seeking extensions, resizing and denotification of the proposed projects," the report, which was tabled in Parliament today, said.
After imposition of minimum alternate tax and dividend distribution tax, there is an increase in the number of denotifications.
The CAG has suggested the department of revenue to revisit the Income Tax Act 1961 and Wealth Tax 1957.
SEZs avail various concessions/exemptions of central as well as state taxes.
