DLF can denotify SEZs on returning tax sops

NEW DELHI: The government has given an in-principle approval to real estate developer DLF for denotifying four of its special economic zones (SEZs) that it wants to surrender on the condition that all tax incentives given to the zones will be refunded.

The board of approvals (BoA) for these manufacturing hubs met on Tuesday and awarded formal approval to eight SEZ proposals and in-principle approval to two proposals.

DLF has said it owes the government Rs 6-7 crore in the form of tax exemptions given to its four SEZs, according to a commerce department official who did not want to named. "We have to verify that amount. A formal denotification of the SEZs will be done after the due taxes are paid to the government," the official said.

The listed real estate developer has decided to apply for denotification of its SEZs in Gujarat, Haryana, West Bengal and Orissa because it feels these projects are no longer feasible due to the economic slowdown and the liquidity crunch the company is facing.

DLF had received approval for 15 SEZs all of which are in the information technology (IT) and infotech-enabled services (ITeS) sector. Of these, five are operational and another five are in the process of being established.

The company had surrendered one SEZ near Delhi in December 2008. Of the 18 proposals BoA discussed on Tuesday, it gave formal approval to eight SEZs, including three for biotech in Andhra Pradesh, Karnataka and Maharashtra and another three for IT and ITeS in Kerala, Karnataka and Maharashtra.

Two proposals that received in-principle approval are for setting up multi-products SEZs in Andhra Pradesh and Maharashtra. A formal approval to set up these zones would be given once the developers take possession of the land. The board extended the formal approval to projects of 21 SEZ developers that could not meet the completion deadline.

The applications of two others, including Videocon Realty, for an extension of approval, were rejected as that they had not begun the process of acquiring land, the official said.