| Date: |
19-02-2015 |
| Subject: |
SEZs lose steam: More opting out |
AHMEDABAD: The biotechnology Special Economic Zone (SEZ) at Vadodara and Biotor Industries Ltd sector specific SEZ at Bharuch of Gujarat Industrial Development Corporation (GIDC) have been recommended to the central government for cancellation of the formal approval granted to the developers. Both the SEZs were notified in 2009.
What's more, the SEZ projects of Dishman Infrastructure Ltd (Engineering SEZ), SGV Infrastructure Private Ltd and Gujarat Growth Center Development Corporation, too, are facing cancellation of formal approvals as these companies have failed to take up any development activity with regard to their SEZ projects.
The fate of these projects would be decided when the Board of Approval for SEZ (BoA), operating under the Union ministry of commerce and industry, meets on Friday.
In September last year, BoA had cancelled formal approvals or notification in case of Essar's multi services SEZ at Jamnagar, Asia Pacific Corporation Ltd's sector specific SEZ in Kutch and GIDC's ceramic and glass industry SEZ at Jhagadia.
With more and more developers opting out of SEZ race, the number of formally approved SEZs in Gujarat has now come down to 35, which also includes notified and operational SEZs. As many as 18 SEZs are operational in the state. Before 2013, Gujarat had 55 approved SEZs.
Recently, Gujarat Hira Bourse, too, has approached the government for de-notification of its gems and jewellery SEZ at Surat, revealed a government official.
"Of the total 35 SEZs with formal approval, 18 SEZs are operational in the state. However, the future of remaining SEZs is uncertain at the moment. Many players are dropping their plans to develop SEZ," said a government official.
According to the SEZ rules, an SEZ should be functional with at least one operational unit within a period of three years from the date of formal approval. Many SEZs have failed to initiate development activities within the stipulated time frame. Hence, they are facing cancellation of approvals granted to them.
Another important factor is a levy of Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) from SEZ units and developers. SEZ developers are finding it difficult to attract units in their SEZ projects due to MAT as it affects the performance and profitability of the units in SEZs. Prior to 2011, units in operational SEZs were exempted from MAT.
Industry experts also opine that in the wake of poor response from companies to set up units in SEZs, the developers are not investing in infrastructure development. As a result, many SEZs have not seen any development activities despite being formally approved. Companies such as Welspun, Essar, Pradip Overseas and Synefra Engineering as well as City Gold Realty Pvt Ltd got their SEZ projects de-notified.
Source : timesofindia.indiatimes.com
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