Five special economic zone (SEZ) developers including Abex Infocom have approached the government to surrender their IT sector tax-free zones.

The Board of Approval (BoA) chaired by Commerce Secretary Rita Teaotia would take a decision on these applications in its meeting on April 28.

All the five zones are from IT/ITeS sector.

In all these cases, “formal approval has been granted by the Department of Commerce. However, since there is no significant progress made by the developer, the concerned Development Commissioner has proposed for cancellation of formal approval granted to the developers,” the agenda of the BoA meeting said.

Last year, about 80 developers had surrendered their zones as progress made by those developers were not satisfactory.

Other developers who have sought government’s approval to cancel there zones include Orion IT Parks, Salarpuria Properties, Bengal Shristi Infrastructure Development Ltd and ML Dalmia & Co Ltd.

Withdrawal of incentives and imposition of taxes like MAT and DDT have impacted the development and growth of these zones.

To revive investors sentiment, the Commerce Ministry is pitching for removal of minimum alternate tax (MAT) and dividend distribution tax (DDT) on SEZs.

SEZs are mainly exports hubs which contribute to about 23 per cent in the country’s total exports.

The ministry wants tax incentives being enjoyed by SEZs should not be abolished. In the Budget, the Finance Minister had said the income tax benefits benefit new SEZ units will be available to those units which commence activity before March 31, 2020.

Exports from such zones in 2014-15 stood at Rs 4,63,770 crore as compared to Rs 4,94,077 crore.

The Export Promotion Council for EoUs and SEZs (EPCES) had said that MAT and DDT on SEZs have dented the investor friendly image of these zones.

[Source:- Businesstoday]