Government may offer sops to SEZs; won't discard MAT, DDT

NEW DELHI: The revenue department may agree to a part of the booster shot for special economic zones ( SEZs) proposed by the commerce ministry, even as it remains firm on not doing away with minimum alternate tax ( MAT) and dividend distribution tax ( DDT), citing the Rs 16,000 crore mop-up through the two levies.

The two departments that do not agree on the tax regime offered to SEZs are due to meet on Friday to look at how to make the zones more attractive, days after PM Narendra Modi announced his government's backing for the enclaves.

On Saturday, Modi had said in Mumbai that a high-level team had been set up to review and resolve the problems faced by SEZs and underlined that these zones play a major part in boosting exports.

Ever since the BJP government took charge at the Centre, there has been talks around reviewing the SEZ policy, which had promised a tax-free regime to investors, but was soon reversed. But, there is little to show in terms of progress on the ground.

Officials said restoring DDT and MAT concessions may be difficult given that the Budget has been passed but some of the other demands raised by the commerce department, such as benefits of the export promotion schemes, may be accepted by the revenue department.

The consultations, which were planned to be held in Modi's presence, come weeks before commerce & industry minister Nirmala Sitharaman announces the Foreign Trade Policy.

The government is planning a relook at several policies, including the labour regime in the zones. There is discussion around a Nasscom demand on treating services exports into the domestic tariff area, or to the non-SEZ area within the country, eligible for benefits.