CII seeks 5-year tax holiday for units in SEZs

Tribune News Service

New Delhi, February 10

Industry body CII has asked the government to allow one-time 100% income tax holiday for five years for all manufacturing units in special economic zones (SEZ) to boost exports and regain investor confidence.

The CII said this will go a long way in motivating exporters to enhance and promote exports through their units in SEZ.

“Otherwise in the backdrop of slowing demand in the international market and continuously declining India’s exports, regaining investor’s confidence in SEZ is very difficult,” said Sanjay Budhia, co-chairman of CII National Committee on International Trade Policy and Exports.

He said over Rs 3 lakh crore has been invested by the government and private enterprises and almost 33% of India’s total exports are done through SEZs. Tax exemptions and provisions proposed in the Act have actually been the impetus for this huge investment.

He said the government’s move to impose Minimum Alternate Tax (MAT) and the Dividend Distribution Tax (DDT) would not be conducive for practical viability of units operating in SEZ. The SEZ Act, 2005, supported by SEZ Rules, came into effect in February, 2006, providing for drastic simplification of procedures and for single-window clearance on matters relating to central as well as state governments.