DIRECT TAXES
| No special sops for large SEZs: MoF Mon, 06 Sep 2010 23:49:52 GMT |
| The Economic Times No special sops for large SEZs: MOF NEW DELHI: The revenue department has shot down a proposal seeking tax concessions to large special economic zones for building infrastructure to ensure contiguity where water-bodies, roads or railway lines pass through them, but the commerce department has hinted it would contest the decision. The decision will see costs going up for several SEZs such as the Navi Mumbai SEZ and the `25,000-crore Iffco-Kisan SEZ coming up in Andhra Pradesh. The commerce department, which had proposed the sops, said it would pursue the issue in the meeting of the board of approval, the central body for approving SEZs and framing rules, later this month. “These are not the views of the BoA. We will definitely try to persuade the BoA,” commerce secretary Rahul Khullar said. In an earlier meeting of the BoA in June, revenue department officials had said they could agree to give sops on materials for building structures such as over-bridges and under-passes by examining requests on a case to case basis. In the subsequent meeting of the BoA on July 13, officials had asked for more time to consider the issue. The department has communicated the decision of not supporting sops in its latest submission to the BoA. SEZ developers don’t have to pay excise duty, customs duty or service tax on materials and services used for constructing infrastructure within the zones. The department has also rejected Navi Mumbai SEZ’s revised proposal for ensuring continuity within the proposed multi-product zone spread over 1,234 hectares with roads and railway lines passing through it. The developers had said they wanted to ensure continuity by constructing sky-walks and gates instead of fly-overs and underpasses as proposed by the government as it involved high costs. The revenue department had expressed concerns that this might lead to revenue leakages as products could be smuggled in and out of the zones due to lack of adequate security. The issues will be discussed when the BoA meets on September 16. It will also discuss new SEZ proposals, including one by Infosys in Bangalore. The government has formally approved the setting up of 577 SEZs, of which about 114 have started operations providing direct employment to 5,50,000 people. Exports from SEZs more than doubled to `2,20,000 crore in 2009-10 and the zones have attracted investments over `1,66,000 crore. |
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