New Delhi, Feb 18 (IANS): With the union budget due Feb 28, the inter-ministerial Board of Approval (BoA) on special economic zones (SEZ) will consider requests Friday from 31 SEZ developers and units for more time to implement their approved projects.
Developers, who have sought more time from the BoA headed by Commerce Secretary Rajeev Kher, include Smart City (Kochi) Infrastructure, Saraf Agencies, Golden Tower Infratech and Torrent Pharmaceuticals, a commerce ministry source here told IANS.
Torrent, a unit in Dahej SEZ, has sought extension of its Letter of Permission beyond Dec 2, 2014.
"The unit has requested for further extension so as to implement the project. The unit has invested Rs.564.52 crore on the project and employed 280 people.
"It has completed construction of factory building, installation of plant and machinery and its support infrastructure," the BoA agenda said.
The BoA will also consider the proposal of Adani Ports and Special Economic Zones to set up a multi-product zone in Gujarat, as well as the applications of 57 developers who have decided to surrender their SEZ approval applications.
The commerce ministry has in its budget proposals, urged the finance minister to relax the tax regime for the SEZs to remove minimum alternate tax (MAT) and dividend distribution tax (DDT).
Commerce Minister Nirmala Sitharaman had told parliament during its recent winter session that the finance ministry had rejected her ministry's demand to remove MAT and DDT.
"There have been demands from various quarters for discontinuing of MAT imposed to SEZ developers and units and DDT levied on SEZ developers. The ministry of commerce and industry had recommended the restoration of original exemption from MAT and DDT to SEZ developers and units. However, ministry of finance has not agreed," she told the Lok Sabha in a written reply.
There are a total of 196 functional SEZs now with maximum number of it in Tamil Nadu, followed by Maharashtra, Karnataka and Telangana.
The SEZs in India had availed tax concessions to the tune of Rs.83,104.76 crore between 2006-07 and 2012-13, a report by official auditor Comptroller and Auditor General of India (CAG) said in a report last November.
"Our review of the tax assessments indicated several instances of extending ineligible exemptions/deduction to the tune of Rs.1,150.06 crore and systemic weakness in direct and indirect tax administration to the tune of Rs.27,130.98 crore," the report said.
The statement of revenue loss on account of various tax sops to SEZs presented along with budget every year is not comprehensive as it does not consider concessions given on account of central excise and service tax, it said.
The report stated that over a period of time, the growth curve of SEZs had indicated preference or urban agglomeration by industry, undermining the objective of promoting balanced regional development.
"Another significant trend in the SEZ growth has been the preponderance of IT/ITeS industry -- 56.64 percent of the country's SEZs cater to IT/ITeS sector while only 9.6 percent cater to the multi-product manufacturing sector," the report added.