No CST on SEZ goods for domestic use: SEZ body
The Export Promotion Council for EOUs and SEZs (EPCES) has said that goods bought from Special Economic Zones (SEZ) for use in the domestic market should be exempted from the Central Sales Tax (CST) on the lines of imports which are not levied CST.
"Imports into the country do not attract CST, and since SEZs are treated as an area outside the customs territory of the country, the tax should not be applicable on goods bought from the SEZs by units in the Domestic Tariff Area (DTA)," EPCES Director-General L B Singhal said.
The body has raised the issue with the Finance Ministry and is expecting a favourable response in the Budget. At present, units in the DTAs have to pay 2% CST on goods bought from the SEZs.
Singhal said that it did not make sense for the DTA units to buy things from SEZs because doing so would subject them to paying both the CST and customs. "If the anomaly is not removed, there will not be purchases from SEZs for domestic consumption and the purpose of SEZs to accelerate economic activity will not be served," he added.