Ministry Proposes To Revamp SEZ Scheme; To Meet India Inc. (27-Jan-2012)
The commerce ministry has called for a meeting with India Inc. on 27 Jan, to try and rationalize procedures for setting up special economic zones in India. The attempt is to draw investors to these enclaves who had caught investor fancy when they were announced five years ago but subsequent policy changes and other hurdles made them a non-starter.
When launched, the SEZ s were to be free of tax impositions but the Finance Minister had slapped a 18.5% MAT (minimum alternate tax), on SEZ units and a 15% dividend distribution tax in last year's budget, leading to a sharp drop in new proposals and an increase in the number of withdrawals.
The issues likely to be addressed are land acquisition, bringing out simplified norms to increase their operational efficiency; easing contiguity norms to remove the difficulties in procuring land; permitting a broader category of types of units that can come up in a sector-specific SEZ; providing incentives to attract investments towards manufacturing-oriented SEZs and to ensure that more SEZs are set up in backward areas.
Land acquisition has been one issue that corporate India is struggling with. It is likely that rules related to purchase and size of land could be relaxed. Right now the minimum land requirement for multi-product SEZs is 1,000 hectares for multi-services and 100 hectares for sector-specific ones. It is proposed that these be reduced to 250 hectares and 40 hectares respectively. A lower size threshold will allow SEZs to begin operations with smaller land parcels and expand as and when more land is available. The definition of vacant land, the type of land on which SEZs have to be built, is also likely to be relaxed. Flexibility in contiguity norms in areas where production activity is not taking place is also in the offing.
The Ministry is also seeking suggestions to make sure that SEZs get more or less similar incentives as being given to exporters in the Domestic Tariff Area (area outside the SEZs) so that the units do not suffer any disadvantage. Unlike their counterparts in the DTA, SEZ units do not get the benefits of duty drawback, focused product and focused market schemes.
Top News Today
 National Thermal Power Corporation (NTPC) will be signing the fuel supply agreements' (FSA) with Coal India for 4,300 megawatts on 2009 terms. In these FSAs companies have change trigger level, which has
 After cellular market leader Bharti Airtel launched its 4G services, now Reliance Industries is reportedly gearing up to launch the services soon and has accordingly partnered with Himachal Futuristic
 Wipro's IT, consulting and outsourcing business Wipro Technologies is likely to introduce India Gateway internship programme for UK university students in July 2012. This internship program consists of
|
International Stock News
 US markets got a good bounce back on Monday with all major indices gaining more than 1%, it was one of the best session of the month. There was some M&A activity along with report that Chinese government
 US markets declined further on Friday, making it the worst week for the markets in 2012, as the most awaited Facebook (FB) IPO was only able to muster a slight gain in its public debut, while the eurozone
 Thursday proved another bad day for the US markets with major indices losing over one to two percent as eurozone debt contagion worries continued, coupled with disappointing economy news. A read on manufacturing
|
|
|