Special Economic Zones (SEZs) will soon be allowed to use infrastructure created within the non-processing areas of the zones for general use ensuring optimum utilisation.

“A notification for dual use of infrastructure in SEZs will be out soon. This will optimise use of infrastructure created within the zones,” Commerce Secretary Rajeev Kher said at an event organised by industry body FICCI on Friday. The step was being taken to make SEZs viable, he added.

Kher said that the issue of removal or lowering of minimum alternate tax (MAT) and dividend distribution tax (DDT) imposed on SEZs could be addressed in next year’s Budget.

“While the taxes may not be totally withdrawn, they may certainly be lowered,” a Commerce Ministry official told BusinessLine .

A MAT of 18.5 per cent and a DDT of 15 per cent was imposed on SEZs a few years ago despite the policy promising a tax-free regime for a fixed number of years.

Export sops Like SEZ investors and units, exporters looking forward to greater fiscal incentives this year, too, may have to wait till the new fiscal for more sops, the Commerce Secretary indicated.

“I feel if you bring out a policy now it could be disruptive. It is better to wait till April 1, especially for new fiscal incentives. But this is my personal view,” he said.

On the issue of attracting more foreign investments into the country, Amitabh Kant, Secretary, Department of Industrial Policy & Promotion (DIPP), who also spoke at the event, said it was important to have a fast track mechanism to sort out pending taxation issues to give confidence to investors.

“There are a large number of pending issues related to transfer pricing, withholding tax and retrospective tax. We can’t expect boards to take decisions to invest more in the country if they have pending tax issues in the country. These issues need to have a fast track mechanism,” he said.

Defence Production Secretary G Mohan Kumar said that following easing of FDI policy in the sector, a large number of prominent companies which make high value products have shown interest in investing in India. Kumar said that in cases where an investor could convince the Government that it was bringing in a unique technology or getting into production of some unique item, the FDI limit of 49 per cent could be relaxed.

Once the Government allows dual use of infrastructure in SEZs, facilities such as hospitals, schools and shopping malls could be used by the general public as well. This will increase returns on investments for SEZ investors.

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