Centre to revise SEZ Act, limiting tax sops and enhancing integration

SEZs are areas within the country that have different economic regulations and are considered as a foreign territory, with the primary focus on promoting exports

The Centre is unlikely to offer new direct tax incentives for units operating in special economic zones (SEZs) and may instead allow the grandfathering of previous exemptions that such units were entitled to, according to proposed amendments to the SEZ Act, 2005, people aware of the matter said.

The amendments, proposed by the commerce department, will soon be considered by the Cabinet for approval. This represents a departure from the department’s earlier plan to introduce these changes through the Development Enterprises and Services Hubs (DESH) Bill, 2023, which faced strong criticism from the Ministry of Finance.

“SEZ developers will be