Economy

SEZs seek continuation of I-T benefits beyond March 31

Our Bureau New Delhi | Updated on March 09, 2020 Published on March 09, 2020

FinMin not likely to agree to an extension, says official

Special Economic Zones (SEZ) have made a case for continuation of income tax benefits beyond March 31 for projects that have received formal approval before March 31, 2017 but may not have been operationalised yet.

In a recent meeting with Commerce & Industry Minister Piyush Goyal, representatives from the Export Promotion Council for EoUs & SEZs (EPCES) also pushed for exclusion of their export sales from the proposed tax collection at source provisions.

“The government may consider I-T benefits for developers of projects that have already obtained formal approvals before March 31, 2017, as land was already in possession of the developers and substantial investments had been made,” as per the submission made by the council.

The sunset clause will set in on direct tax benefits for SEZs on March 31 this year. Units starting operations after the date, will not be extended the direct tax benefits, as per the present rules.

“It seems unlikely that the Finance Ministry will agree to push the date for the sunset clause beyond March 31. The Commerce & Industry Ministry has been asking for an extension but a positive outcome has not come yet,” an official told BusinessLine.

The EPCES delegation pointed out that a clarification was required on the proposed tax collection at source (TCS) on sale of goods clause of the Finance Bill 2020. According to the proposed provision, sellers having annual turnover of more than ₹10 crore have to collect tax on sale of goods at 0.10 per cent from the buyer (1 per cent in case of buyers not having PAN) of the sale consideration exceeding ₹50 lakh as income-tax.

“The SEZ sector desires that their export sales may be excluded from the proposed TCS provisions because as per the provision they have to collect TCS on their export sales from their overseas/foreign buyers,” the submission said.

Exports from SEZs were valued at $70 billion in 2016-17 posting a growth of over 12 per cent compared to the previous year. Of the 417 SEZs that have received formal approval, only 238 are operational.

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Published on March 09, 2020
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