Public Accounts Committee calls for penal deterrent for SEZ tax evaders

NEW DELHI: The Public Accounts Committee has called for deterrent penal provisions against units in Special Economic Zones which evade/default duty payments to the exchequer.

PAC, which adopted a report to this effect at its Thursday meeting, has recommended an oversight mechanism which would “ensure that there was no misuse of the SEZ policy”.

The panel based its findings on a sample of 22 SEZ units where it found that “out of an overall export of Rs 7,149.23 crore made by 22 SEZ units, the actual export content was only Rs 1,999.27 crore (28%) and the remaining Rs 5,149.96 crores (72%) related to Domestic Tariff Area earnings.”

The committee has recommended that all SEZs undertake physical export of at least 51% of their product, and even import tax waivers raw material for goods falling under the Domestic Tariff Area be considered on the credit account of the SEZ firms.