SEZs to enjoy tax benefits even after 2011
SEZ units and their developers would continue to enjoy tax incentives including income-tax benefits as guaranteed under SEZ Act of 2005 even after 2011 when the government adopts its new Direct Tax Code, according to the director general, Export Promotion Council for EOUs and SEZs, Dr LB Singhal. The Finance Ministry will shortly issue a Notification to this effect.
Dr Singhal was speaking while inaugurating the International Convention on SEZs organised by Assocham. Dr. Singhal announced that Ministry of Commerce has been pursuing this issue with the Finance Ministry as its Direct Tax Code unveiled for public consumption is silent if existing tax benefits and income-tax exemptions would continue for SEZs and their developers after it becomes operative from 2011 onwards.
“Positive indications have come to Export Promotion Council for EOUs and SEZs from Commerce Ministry that Finance Ministry is likely to issue a notification in this regard in next few weeks, enunciating that SEZ units and their developers would be entitled to avail tax benefits as guaranteed under 2005 SEZs Act after the government adopts its new Direct Tax Code”, indicated Dr Singhal.
It may be mentioned that the SEZ Act of 2005 become operational from 10th of February 2006 under which SEZs units and their developers enjoy taxation and income-tax benefits.
Dr. Singhal also announced that from November 2009 onwards, SEZ units and their developers would get online clearances from Ministry of Commerce to commence work in SEZ units in Mumbai. The decision has been taken recently that from April 2010 onwards, SEZ units in Delhi would get clearances for making their establishment operative and thereafter this facility would be extended to all parts of the country for SEZs units.
Dr. Singhal stated that SEZ scheme has done extremely well after operationalization of SEZ Act and Rules on 10th February 2006 as in the SEZs incremental investment of Rs.1,10,605 crore has been made and the exports from SEZs has gone up from Rs22,840 crore in 2005-06 to Rs.99,689 crore in 2008-09 in the last year.
Speaking on the occasion, Development Commissioner Noida SEZ, SC Panda said that the Commerce Ministry has issue directives to make single window system more effective for giving clearances for SEZ units within 15 days after their application have been submitted. Ever since, this directive came SEZ boards throughout the State are mandatory meeting twice in a month for giving approvals so that more and more SEZ units become operative to contribute to exports.
Assocham SEZ Council Co-Chairman, Navin Raheja said that SEZs were hassle-free zones where clearances are hardly delay and added that since there are not many operators have so far come into SEZ units, this is the opportune time to park investors money in such zones.