Commerce Ministry to pitch for scrapping taxes on SEZs
The Commerce Ministry has come to a conclusion that once the Narendra Modi and his government comes to power, there will be a new pitch for restoring the tax benefits for the SEZ (Special Economic Zones)
Earlier the taxes of SEZ were free from any kind of obligation but since the yea 2011-12, this came to a sudden end. This happened 6 years after the SEZ Act was passed because a minimum alternate tax had emerged of 18.5% by the Finance Ministry.
There were several promises laid down by the SEZ Act. There would be tax holiday on profits for five years in total. There would also be a 50% exemption on all taxes for the same period of time. Tax holidays for ten years and fifteen years were promised to all developers.
Since there were serious obstructions in luring new investments, the political activity of lobbying was being carried out by the Commerce Ministry for the past three years. The purpose is to insist the Finance Ministry to withdraw the taxes or even lower the MAT up to 7.5%.
The Commerce Ministry believes that the new government will show some sense of sympathy towards the developers. This is because out of the small number of SEZs being operational in Gujarat when around 43 of them were approved of.
Once the government enforced MAT, some of the biggest corporate such as the RIL, Ansals, Essar, DLF and Omaxe ensured that some of their SEZs have been denotified.
There are about 576 SEZs that have been approved in the country and out of all of them; some are operational while others are exporting. After MAT was emerged, some of them were also de-notified.
Source: Amiti Sen
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