Finance Ministry to roll-back the MAT on SEZs: Expected to boost exports
As per the Economic Survey report, fresh investments have slowed down in SEZs in the recent years. The report has urged the government to give clear signal to revive the special economic zones (SEZ). The SEZs were major export and manufacturing hubs, and every company wanted to open their units in SEZs. However in the recent years due to the global economic slowdown, the demand for exported goods went down. This was further dampened by imposing Minimum Alternate Tax (MAT) and Dividend Distribution Tax in 2011 on them.
The pre-Budget document, the Economic Survey report clearly mentioned that the greenfield (new) SEZs have not really taken of full swing. Many SEZs remain un-operational and occupancy levels are very low in them. This report which was tabled in Parliament mentioned that the new national investment and manufacturing zones (NIMZs) are being planned; a lot of investment has already been made in SEZs. However the output is very lukewarm and the SEZs are waiting to tap the full potential.
There are also areas where SEZs are worse off than domestic tariff area (DTA) units due to non- applicability of FTA concessions when SEZs sell in DTAs.
The good news is that the Commerce Ministry has already asked the Finance Ministry to roll-back the MAT on SEZs, demanding that the levy has suppressed the potential of these zones as a tool to promote exports and generate employment.
Source- Financial Chronicle
distribution, Dividend Distribution Tax, Economic Survey 2014, Finance Ministry to roll-back the MAT on SEZs, Insurability, Investments, Minimum Alternate Tax, net worth, special economic zones
