The commerce ministry has expressed strong reservations on the provisions envisaged in the new revised discussion paper on direct taxes code for the special economic zones. “We are extremely concerned about the direct taxes code provisions for SEZs,” commerce secretary Rahul Khullar said on Friday.
SEZ story had been phenomenal of success for the last five years. The government had approved 575 SEZs till now of which 300 had been notified and another 90 would be done by the year end. Investments worth Rs 1.50 lakh crore have been made in these zones while exports from these regions crossed Rs 2.20 lakh crore, he said.
The revised DTC envisages that existing tax exemptions to the SEZ units would not be available from April 2011 while SEZ developers would continue to enjoy the same under the SEZ Act. This, he said, would drive away the units willing to be located in the SEZs, which ultimately might spell doom to the future growth of these regions.
“It will definitely affect India’s growth and exports,” he said at the open house organised by Export Promotion Council for EoUs and SEZ Units. The revised DTC would also deter developers to set up the zones.
As far as tax perspectives were concerned, there were no issues, Khullar said.