Government gives time to 18 SEZ developers for executing projects

NEW DELHI: The government has given more time to as many as 18 special economic zone (SEZ) developers, including Tata Consultancy and G P Realtors to execute their projects, a Commerce Ministry official said.

At a meeting on September 14, the Board of Approval (BoA), headed by Commerce Secretary S R Rao, also allowed two SEZ developers to surrender their project. The BoA is a 19-member inter-ministerial body that deals with SEZs and the issues related to them.

Bengal Shapoorji Infrastructure Development Ltd has sought denotification of its IT zone in West Bengal.

The minutes of the meeting said the developers surrendering their projects have to obtain a certificate from the respective Development Commissioners that "the developer has either not availed or has refunded all the tax/duty benefits under the SEZ Act/Rules in respect of the area to be denotified".

Further, the developers which have sought one to two more years for implementation of their projects have different cited reasons like economic slowdown and imposition of MAT.

Both Tata Consultancy and G P Realtors have got one more year to implement their projects. However, Tata Consultancy had sought two more years for its zone.

Tata Consultancy and G P Realtors want to set up IT SEZ in West Bengal and Haryana, respectively.

According to an industry experts, uncertainty over the tax exemptions for new SEZs has also led to declining interest in the duty-free zones. Investors are apprehensive about the new draft Direct Taxes Code (DTC).

"During the last few years hundreds of developers have sought more time for their zones," an industry expert said.

According to the revised DTC draft, which will replace the Income Tax Act of 1961, tax exemptions for SEZs will be confined to already existing units.

However, to boost investors confidence in these zones, the government is planning to revive the SEZ rules.

SEZs have been losing appeal among investors since 2008 because of tough global economic conditions and uncertainty over continuation of the tax incentives to these enclaves.

Exports from SEZs stood at Rs 3.65 lakh crore in 2011-12. With investment of Rs 2.02 lakh crore, these zones provide employment to over 8.45 lakh.