SEZ developers want CST removed on domestic sale

NEW DELHI: Goods bought from SEZs for use in the domestic market should be exempted from the Central Sales Tax in the lines of imports which are not levied CST, an industry body of SEZ developers has said.

The Export Promotion Council for EOUs and SEZs (EPCES) has raised the issue with the Finance Ministry and is expecting a favourable response in the Budget.

"Imports into the country do not attract CST, and since SEZs are treated as an area outside the customs territory of the country, the tax should not be applicable on goods bought from the SEZs by units in the Domestic Tariff Area (DTA)," EPCES Director-General L B Singhal said.

At present, units in the DTAs have to pay two per cent CST on goods bought from the Special Economic Zones.

Singhal said it did not make sense for the DTA units to buy things from SEZs because doing so would subject them to paying both the CST and customs.

"If the anomaly is not removed, there will not be purchases from SEZs for domestic consumption and the purpose of SEZs to accelerate economic activity will not be served," Singhal said, adding, "as it is SEZs are feeling the heat of the global economic slowdown."