NEW DELHI: As many as five developers, including that of L&T Construction Equipment and Worldwide Oilfield Machine, have sought the government’s nod to set up new special economic zones (SEZs) in the country. These applications will be taken up at the meeting of the Board of Approval (BoA) headed by Commerce Secretary Rita Teaotia on January 6 here, an official said.
Worldwide Oilfield Machine has proposed to set up a sector-specific SEZ for engineering in Pune over 58.23 hectares. The land is proposed to be purchased from agriculturists through negotiations, it said. Similarly, L&T Construction Equipment (reality division) is keen to put up an IT/ITeS SEZ in Karnataka over 2.34 hectares. The other developers that have sought the commerce ministry approval include Embassy Property Developments, Horizonview Properties and Phoenix Embassy Tech Zone. They all have planned to set up IT/ITeS SEZs.
According to an industry expert, the increase in number of proposals to set up new zones reflects a gradual increase in investor interest in SEZs, which act as export hubs. After the government imposed minimum alternate tax and dividend distribution tax, these zones started losing their sheen. The developers and units want the government to withdraw or significantly reduce the taxes.
The commerce ministry has time and again called upon its finance counterpart not to abolish the tax incentives being enjoyed by SEZs as their removal would hurt exports and job creation. Developers and units in SEZs enjoy certain tax and other procedural benefits. The government is considering gradually doing away with tax exemptions to various sectors, including special economic zones.
SEZs enjoy 100 per cent income tax exemption on export income for the first five years, 50 per cent for the next five and 50 per cent of the ploughed back export profit for another five years. Exports from these zones logged a marginal growth of 0.77 per cent at Rs 4.67 lakh crore in 2015-16. The exports from such 204 zones stood at Rs 4.63 lakh crore in 2014-15.
According to commerce ministry data as on March 31, these zones have attracted investments worth Rs 3.76 lakh crore and have generated employment for 15.91 lakh people.
Credits ET Realty