Withdrawal of SEZ tax sops to hit exports, jobs: Trade body

New Delhi: The government should not withdraw any tax incentives from special economic zones as it might adversely impact exports and job creation, EPCES, a trade promotion body, Tuesday said.

Any kind of policy reversal will have implications on these zones, Export Promotion Council for EOUs and SEZs (EPCES) Vice-Chairman Rahul Gupta told reporters here.

"We strongly oppose a Central Board of Direct Taxes proposal of withdrawal of all direct tax benefits for the SEZ developers which would not be operational till April 2017," he said.

He is of the view that such proposals will send negative signals to investors.

Backing up his case, Gupta said imposition of minimum alternate tax (MAT) has already "adversely" impacted investments, exports and employment from these zones.

Commerce Secretary Rita Teaotia, he said, has convened a meeting on December 10 to discuss SEZ issues.

"We would again raise the issue of MAT. We would also suggest for concession in Customs duty that is payable when cleared from SEZ to domestic tariff area (DTA)," he said.

"We will also take up the issue of providing job work facility to SEZs on behalf of DTA to utilise the idle capacity."

Talking about "a lot of uncertainty" due to MAT, Gupta said the SEZ sector is facing a slowdown in terms of growth in exports, slower operationalisation, increased number of applications for denotification of approved zones.

During April-September this fiscal, exports from these zones stood at Rs 2.21 lakh crore as against Rs 4.63 lakh crore in 2014-15.

During the first half of this fiscal, these zones generated jobs for 15.44 lakh people.