Now the Government has tried to revive investor interest in Special Economic Zones (SEZ) after slapping minimum alternate tax on them three years ago, which drove SEZ investors away. Now the government is striving to revive investors’ interest by halving the minimum area requirement for multi-product and sector-specific zones and doing away with the condition totally for IT zones.
SEZ developers and units, however, are still feeling short-changed as no fiscal incentive has been extended to them. Finance Minister P Chidambaram has firmly refused all attempts made by Commerce & Industry Minister Anand Sharma to reduce the level of MAT applicable on SEZs or extend export sops to units.
Sharma said that he had tried his best to push the issue with the Finance Minister, but things were not in his hands. Despite lack of fiscal incentives, the operational flexibility given to SEZs could attract investors. In addition to reduction in minimum area required, sector-specific zones will be free to add additional sectors if they are get more land. Such zones will have the flexibility to set up additional units to encompass related areas under the same sector.
Union Commerce & Industry Minister Anand Sharma said that the SEZ scheme has been a key instrument for promoting exports from India. The government is to announce a package of reforms for reviving investor interest in SEZs, he added.
The minimum area requirement for multi-product SEZs has come down to 500 hectares from 1,000 hectares while sector-specific SEZs will be allowed to come up in an area of 50 hectares, down from 100 hectares.
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