The Government has given more time to as many as 37 special economic zone developers, including Navi Mumbai SEZ, DLF Commercial Developers and Tata Consultancy Services, to execute their projects.
At a meeting on September 19, the Board of Approval (BoA) headed by the Commerce Secretary, Dr Rahul Khullar, also allowed five SEZ developers to surrender their projects. The BoA is a 19-member inter-ministerial body that deals with Special Economic Zones (SEZs) and related issues.
However, the developers surrendering their projects have to obtain a certificate from the respective Development Commissioners that “they have refunded all the tax/duty benefits availed under SEZ Act/Rules,” a senior Commerce Ministry official said.
SEZ developers, including Maharashtra Industrial Development Corporation and Benchmark Realty, had approached the BoA to surrender their projects.
According to an industry expert, uncertainty over whether new SEZs will be eligible for tax exemptions - which are proposed to be confined to existing units in the latest draft of the Direct Taxes Code Bill - has dampened interest in the tax-free enclaves.
Other developers that got more time to execute their projects include Raheja SEZ, Parsvnath SEZ and Wockhardt Infrastructure Development.
It has deferred the extension of two applications - Peninsula Pharma Research Centre and Meditab Specialties - as the issues were sub-judice before the apex court.
The BoA also approved three new proposals, including one for setting up a sector-specific SEZ for the petroleum and oil and gas industry in Visakhapatnam.
Regarding the revision of guidelines for power generation, transmission and distribution in SEZs, the board gave two weeks’ time to the Department of Revenue for their comments.
Under the SEZ Act, SEZ units get 100 per cent tax exemption on profits earned in the first five years of operation, a 50 per cent exemption for the next five years and another 50 per cent exemption on re-invested profits in the following five years.
SEZ developers, on the other hand, get 100 per cent tax exemption on profits for 10 years, which they can choose to invoke within the first 15 years of operation.
Merchandise exports from the 143 operational SEZs in the country totalled Rs 72,255 crore in the April-June period, an increase of 23 per cent vis-a-vis the same period last year.