New Delhi : Reflecting economic slowdown and delays in land acquisition, 32 developers including Uttam Galva Steels, Unitech Infracon and Navi Mumbai
SEZ have sought more time from the government for implementing their special economic zone projects.
Mahindra & Mahindra, Mumbai SEZ Ltd and GMR Hyderabad International Airport have also requested for additional time for project implementation from the Board of Approval (BoA), headed by Commerce Secretary S R Rao. The BoA, a 19-member inter-ministerial body that deals with special economic zone (SEZ) related matters, will consider these applications on July 6 meeting.
"The developers have sought one to two more years for implementation of their projects. They have cited reasons like global meltdown and problems in land acquisition for delay in projects," an official said.
Another two promoters - Ansal SEZ Projects and Shyam Steel Industries - have approached the Commerce Ministry for surrendering their projects, citing reasons like imposition of minimum alternate tax and lack of response from infrastructure developers.
Ansal has approached the BoA for surrendering its It/ITeS tax-free enclave at Gurgaon, the BoA agenda note said. According to an industry experts, uncertainty over the tax exemptions for new SEZs has also led to declining interest in the duty-free zones. Investors are very apprehensive about the new draft Direct Taxes Code (DTC).
According to the revised DTC draft, which will replace the Income Tax Act of 1961, tax exemptions for SEZs will be confined to already existing units.
The board will also take up four applications for setting up new zones.
However, to boost investors confidence in these zones, the government is planning incentives for developers who want to set up SEZs in remote and undeveloped areas.
The government is considering to relax minimum land area requirement for different categories of SEZ, besides extending the benefits of export schemes to SEZ units, that are already available to entities outside the zone.
SEZs have been losing appeal among investors since 2008 because of tough global economic conditions and uncertainty over continuation of the tax incentives to these enclaves. Exports from SEZs stood at Rs 3.65 lakh crore in 2011-12. With investment of Rs 2.02 crore, these zones provide employment to over 8.45 lakh. Overseas shipments from the 153 operational tax free havens have come down to 12 per cent in the country's total exports from about 30 per cent in the previous years.
Source : financialexpress.com