Industry & Economy
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Infrastructure
‘SEZ duty issues to be resolved soon’
Our Bureau
Chennai, Dec. 2 SEZs are doing well, the basic structure of the policy would not be altered and issues relating to service tax, DEPB and duty drawback would soon be resolved, according to Mr. L.B. Singhal, Director General, Export Promotion Council for EOUs and SEZs.
The consensus among the Empowered Group of Ministers in three meetings between August and October is that the SEZ scheme is doing well with exports from SEZs expected to double to Rs 1.25 lakh crore in the current year. Since 2004-05, exports have tripled to Rs 66,000 crore in 2007-08 from SEZs. So the basic structure of the policy will not be altered and long-term stability would be ensured.
Tax exemption
Addressing the National Summit on Special Economic Zones-Resolving Policy and Tax Issues, organised by Assocham, Mr Singhal said that soon the service tax exemption for services consumed within the zone would also be available for the services provided outside the zone through refund. This would benefit the SEZ developer and the units within the SEZ.
Similarly, the DEPB and duty drawback and CENVAT credit, which the SEZ developers could not avail themselves of, would also be extended to the developers, Mr Singhal said.
Ministers’ request
The Empowered Group of Ministers has written to the Reserve Bank of India recommending that SEZs should be considered infrastructure projects and not as real estate development, the current practice among banks. As real estate projects, banks are reluctant to fund them, he said.
There was some divergence of views between the Commerce Ministry and Finance Ministry on income-tax benefits but these are being discussed, Mr Singhal said.
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