Soon Special Economic zone (SEZ) will be a thing of past as
government is planning to do away with SEZ because of a lot of scams. This was
the biggest programme to develop the industries by giving them many benefits in
2006.
This only means of developing new SEZ as the existing will remain operational
and the land allotted to developer may permit to use on different purpose.
The government also collected data of SEZ success rate as commerce
ministry asked Promotion Council for EoUs and SEZs ( EPCES) to give all the
data about SEZ success and failure. The ministry gives sic month time to the
council for presenting the report.
The main problem is between commerce and finance ministry as
finance ministry believes some data over showed of export as well as jobs
provided by SEZ.
As per senior commerce department official “There has always been
some tension between the two ministries over the success of SEZs. So, we are
doing a study by a neutral organization on whether it has been able to measure
up to its objectives. Else,
we see no point in continuing with this scheme and giving them tax subsidies,”
SEZ problems start arising in 2011-12 when Minimum Alternate tax
was imposed on SEZ as well as Dividend Distribution Tax (DDT) on developers.
However the commerce ministry also feels that the existing SEZ
going very well as they hold almost 30% part of export and grew at the rate of
30% in financial year 2012-13 where total export of India decreased for the
same year. As per latest data of 31 March 2013, SEZ has provided over 10 lakh
jobs.
At present around 170 SEZ are operating whereas government
approved 577 and out of them 380 notified.
Exemptions of income tax-However SEZ has many exemption but the
most of it are exemption in income tax and excise duty. Under
Section 10AA of the I- T Act, SEZ units enjoy 100% I- T exemption on export
income for first five years, 50% for next five years, and 50% of ploughed- back
export profit for the next five years Hit to exchequer.
The moral of the story is government needs money. It doesn’t care
of domestic industries, job provided or export figures. It needs money through
excise duty and income tax which only can fill their pockets.
