From ET Realty
NEW DELHI: The Union Budget has not announced any measure with regard to removal or cut in the minimum alternate tax which will impact growth of the special economic zones, an industry body said.
The industry had demanded removal or reduction in the 18.5 per cent minimum alternate tax on special economic zones (SEZ) units in the Budget.
“Though extension of income tax benefit for SEZ units till 2020 is a positive feature, imposition of MAT on new SEZ units will not allow the full impact of the benefit,” Export Promotion Council for EOUs and SEZs (EPCES) Vice-Chairman Rahul Gupta said in a statement.
EPCES is the apex body of special economic zones.
The MAT would led to increased number of applications for de-notification of approved SEZs, he said, adding there is already slowdown in SEZ sector in terms of growth in exports, investments and employment generation.
P C Nambiar, Chairman of the Export Promotion Council for EOUs and SEZs (EPCES) said that “no major measure has been taken this time” to promote these zones.
He requested that certain steps such as withdrawal of MAT should be immediately implemented to provide support to SEZs.
In the Budget, the government has said that tax benefits will be available to only those SEZ units, which will commence commercial activity before March 31, 2020.
The move was aimed at prompting such units to expeditiously complete their projects and begin operations.
During April-September, exports from these zones stood at Rs 2.21 lakh crore as against Rs 4.63 lakh crore in 2014-15.
The SEZs enjoy 100 per cent income tax exemption on export income for the first five years, 50 per cent for the next five years thereafter and 50 per cent of the ploughed back export profit for another five years.
About 500 proposals for SEZs have been formally approved by the government, out of which over 200 are operational.