SEZ revival package leaves out industry demand for MAT waiver
New Delhi: The government Thursday unveiled a package of reforms including easing of land norms to revive investments in SEZs, but refrained from accepting a major demand of developers for MAT waiver due to fiscal constraints.
"The SEZ scheme has not been able to realise its full potential so far. We have undertaken a comprehensive review of the SEZ Policy... I am happy to announce a package of reforms for reviving investor interest in SEZs," Commerce and Industry Minister Anand Sharma said.
The package includes reducing the Minimum Land Area Requirement by half for different categories of SEZs, an exit policy by allowing transfer of ownership of SEZ units including sale and doing away with minimum land requirement criteria for IT\ITES zones.
While the Export Promotion Council for EOUs and SEZs welcomed the steps, it said the initiative "may not result" in a substantial investments in the sector due to the levy of Minimum Alternate Tax (MAT).
"This issue needs to be addressed very seriously for attracting investments," it said.
To a query on MAT, Sharma said it is beyond "my purview and jurisdiction" to do away with MAT, but concerns of the SEZ developers and promoters have been duly communicated to the ministry concerned.
"There has been discussions, but because of constraints, the Finance Minister was not inclined to review the measures introduced earlier," Sharma said, adding that the reforms will help the sector.
SEZ, once an attraction for investors, lost the sheen following imposition of MAT and DDT, certain provisions in the proposed direct tax regime (DTC) as well as global slowdown.
The Council said several notified zones are awaiting waiver of MAT to operationalise their export hubs.
The 170 functional SEZs have attracted investment of over Rs 2.36 lakh crore and exports from them totalled Rs 4.76 lakh crore in 2012-13.