SEZs lie in a disadvantageous position
Investments in Special Economic Zones (SEZs) declined as a result of introduction of Minimum Alternative Tax (MAT) and Dividend Distribution Tax (DDT), which led to negative investor sentiments, a study commissioned by the Commerce Ministry has said.
Moreover, products manufactured in the zones have become non-competitive in the domestic tariff area (rest of the country) due to high import duty structure and zero or lower tariffs due to free trade agreements, the study titled ‘SEZs in India-Issues and Way Forward’ carried out by research body ICRIER highlighted.
SEZ units are rather at a disadvantageous position as they are not eligible for benefits under the Foreign Trade Policy the study said. To make SEZs attractive again for investors, both domestic and foreign, the study, by ICRIER Professor Arpita Mukherjee, has recommended aligning the SEZ policy with the Foreign Trade Policy so that units in the zone, too, can benefit from incentives given to exporters.
The government have to look into the fact so that the SEZ units come out from a disadvantageous position.
Source: The Hindu Business Line
Commerce Ministry, Dividend Distribution Tax, Foreign Trade Policy, free trade agreements, ICRIER, Minimum Alternative Tax, SEZ policy, special economic zones
