As many as 33 developers surrendered their special economic zone (SEZ) projects between December, 2008, and July, 2011, Parliament was informed today.
The reasons given by applicants for denotification of their projects range from the economic meltdown, poor market response, non-availability of a skilled labour force, lack of demand for IT/ITeS space and the imposition of minimum alternate tax (MAT) and dividend distribution tax (DDT) on SEZs, Minister of State for Commerce and Industry Jyotiraditya Scindia said in a written reply to the Rajya Sabha.
"From December, 2008, till July 31, 2011, the Board of Approval on SEZs has approved 33 such cases, subject to the refund of duty benefits availed, if any, by the developer," he said.
The Board of Approval (BoA), a 19-member inter-ministerial body headed by Commerce Secretary Rahul Khullar, deals with issues concerning tax-free enclaves and export-oriented units (EOUs).
The requests for denotification considered by the BoA include those of DLF Ltd, Maytas Ventures
SEZ Ltd, Essar SEZ Hazira Ltd, Unitech Infopark , Bata India , JSL Ltd and Satyam Computer Services , he added.
SEZs, which were touted as major vehicles for investment and export promotion, were given a host of tax exemptions under the special SEZ Act of 2005.
Exports from the 143 tax-free enclaves grew by 23% year-on-year during the first quarter of 2011-12 to Rs 72,255 crore.
Under the law, the incentives for SEZ units include 100% income tax exemption on export profits earned for the first five years, 50% for the next five years and another 50% exemption on re-invested profits in the following five years.
Source : moneycontrol.com