Govt to take up 10 fresh SEZ proposals tomorrow

NEW DELHI: The Centre will take up ten new requests for setting up Special Economic Zones here on Thursday, even as some entrepreneurs have expressed fears that the proposed Direct Taxes Code ( DTC) will hit employment and drive away investors from the zones.

The inter-ministerial Board of Approval (BoA) scheduled to meet here on Thursday is also likely to take a decision on the country's largest stainless steel producer JSL's request for de-notification of its sector-specific project in Orissa.

Realty major Raheja Universal Ltd has also approached the government to surrender its SEZ, located in Maharashtra.

The board, headed by Commerce Secretary Rahul Khullar, may also come out with strict norms for units in SEZs engaged in recycling of plastic.

"Currently, there is no specific provision in the SEZ Act for such units," he said.

Those who have approached the BoA for setting up new tax free zones include Infosys Technologies Ltd, Lepakshi Knowledge Hub Pvt Ltd, Wipro and Suryo Infra Projects.

The board will also decide on the applications of over 20 developers, including Wipro, Mahindra and Mahindra and Ansal SEZ Projects, for additional time to execute their projects.

While SEZs have emerged as a major source for attracting investment and increasing exports, entrepreneurs have expressed serious concerns over the DTC Bill introduced in the Lok Sabha last month, saying the proposed tax provisions would adversely impact employment and investment in SEZs.

The Export Promotion Council for EoUs and SEZs (EPCES) said that by altering the SEZ Act through the proposed Direct Tax Code (DTC), the government is sending the wrong message to investors.

Direct employment in SEZs has gone beyond 5.5 lakh people and investments have crossed Rs 1.66 lakh crore.

Exports from 114 operational SEZs in the last fiscal were valued at Rs 2.20 lakh crore.

Concerns have also been raised on the proposed sunset clause on tax breaks for SEZs in the proposed DTC.

The Bill has proposed that only SEZs notified on or before March 31, 2012, will get tax benefits. Furthermore, only those SEZ units that commence commercial operations by March, 2014, shall be allowed profit-linked deductions permitted under the Income Tax Act, 1961.