The Centre must exempt all approved special economic zones (SEZs) from levy of minimum alternate tax (MAT) and dividend distribution tax (DDT), industry body Assocham has suggested.
SEZ developers should also be completely exempted from both MAT and DDT levy, the chamber said in a pre-budget memorandum submitted to the Finance Ministry here.
The business of SEZ development has come to a halt ever since the then existing exemption from MAT levy on SEZs was withdrawn from April 1, 2012, the pre-budget memorandum submitted.
Because of the adverse tax treatment, many companies have now approached the Commerce Ministry to de-notify them from the SEZs, it was pointed out.
"The whole purpose with which the SEZ Act 2005 was introduced by Parliament was defeated and has harmed the country in its developmental progress", the chamber has said.
Assocham has also said that exempting SEZs from MAT and DDT levy could revive interest in such zones.
Besides making a case for reduction of DDT rate from the current level of 20.36 per cent to 15 per cent, the chamber has also called for scrapping of commodities transaction tax.