Commerce Ministry to take steps to improve ease of doing business for SEZs
New Delhi: As the removal of MAT and DDT is unlikely, the Commerce Ministry has initiated the exercise to facilitate ease of doing business for special economic zones (SEZs) to revive the interest of investors. As part of the initiative, the ministry is considering steps to further improve the ease of doing business for the developers and units of SEZs. Among several measures, it is considering to empower the Development Commissioners (DCs) of such zones to reduce paper work.
The Commerce Ministry's request to remove minimum alternate tax (MAT) and dividend distribution tax (DDT) was not entertained by the Finance Ministry in the Budget. "Now it is difficult that the Finance Ministry would remove MAT and DDT. So the ministry would have to work on improving the ease of doing business for these SEZs," a senior government official told. It is also mulling to empower the unit approval committees (UACs) so that a developer or unit won't have to come every time to the Board of Approval (BoA) for permissions and approvals.
Currently, a unit in SEZs have to approach the BoA, chaired by the Commerce Secretary, for small things like constructing additional gates or bringing a new co-developer. The efforts would help in further strengthening the single window clearance mechanism of UACs headed by DCs. "The ministry would soon convene a meeting of senior officials of the states including Maharashtra, Gujarat and Tamil Nadu where the number of SEZs are more, to discuss the matter. DCs will also attend the meeting," the official added. So far 491 proposals for SEZs have been formally approved by the government. Presently, 199 zones are operational.
The maximum of 36 SEZs are operational in Tamil Nadu, followed by 25 each in Karnataka, Maharashtra and Telangana, 19 in Andhra Pradesh and 18 in Gujarat. The industry has been complaining that MAT and DDT on SEZs have dented the investor sentiment and also implementation of the scheme. In 2012, government had imposed 18.5 per cent MAT on the book profits of SEZ developers and units. SEZs, which are major export hubs, contribute about one-third to the country’s total exports. They provide employment to about 15 lakh persons.
