New Delhi, Jan .24: The Commerce Ministry — the nodal body for Special Economic Zones — has called for a meeting with India Inc on January 27 to seek its suggestions for making the SEZ scheme attractive to investors.
The Ministry also wants to bring out norms soon to ‘offset the burden' on SEZs due to the imposition of Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT).
The meeting is expected to be attended by top executives from realty majors such as DLF, leading information technology companies such as Infosys, as well as representatives from industry bodies such as CII, FICCI and Assocham and software industry body Nasscom, official sources told Business Line.
After the meeting, the Commerce Ministry is likely to take a call on revamping the scheme by reducing the minimum required land area to set up an SEZ; bringing out simplified norms to increase their operational efficiency; easing contiguity norms to remove the difficulties in procuring land; permitting a broader category of types of units that can come up in a sector-specific SEZ; providing incentives to attract investments towards manufacturing-oriented SEZs and to ensure that more SEZs are set up in backward areas.
Sops similar to exporters in DTA
The Ministry is also seeking suggestions to make sure that SEZs get more or less similar incentives as being given to exporters in the Domestic Tariff Area (area outside the SEZs) so that the units do not suffer any disadvantage. Unlike their counterparts in the DTA, SEZ units do not get the benefits of duty drawback, focused product and focused market schemes.
“We will try and convince the business community to look beyond tax benefits and invest in SEZs to boost their exports,” an official said, adding that the Government wants SEZs to be the drivers in helping the country achieve the export target of $500 billion by 2013-14.
The imposition of MAT, along with DDT, on SEZ developers and only MAT on SEZ units as well as the Direct Taxes Code proposal to withdraw profit-linked deductions for SEZs has led to a fall in investments into SEZs. Also, there has also been a significant decline in the proposals for establishing new SEZs and an increase in applications from companies to withdraw their SEZ plans.
Source : thehindubusinessline.com