Telangana: GST sop makes SEZs attractive proposition
TS receives applications for special zones in districts.
Hyderabad: Special economic zones are back in demand in the state, thanks to the decision of the Centre to exempt the goods and services imported by a unit or a developer of a SEZ from levy of integrated goods and services tax (iGST).
The exemption has been prompting developers to set up new SEZs.
In the pre GST regime, Hyderabad and surrounding districts were the sought after to set up SEZs. Post-GST, applications to set up SEZs in Tier-II cities like Wa-rangal, Karimnagar, Nizamabad are being submitted to government.
The state government has been forwarding these applications to union ministry of commerce and industries for approval.
With the iGST exemption, all supplies to SEZs have come under ‘zero tax’ slab and any imports of goods into SEZs are also not taxable, which brings the same position that existed prior to GST.
This will help reduce the working capital requirements of units working from SEZs.
The demand for setting up units in SEZs to claim GST exemption has shot up all of a sudden.
To cash in on the demand, developers are planning to set up new SEZs. Telangana is among the top 5 states in the country having SEZs.
The Congress government had sanctioned 70 SEZs in the state. Of them only 30 are operational and 40 remain non-functional or semi-functional.
Of them, 20 SEZs failed to commence any operations and the TS government sought cancellation of their SEZ status now.
Interestingly, majority of these 20 SEZs are owned by Deccan Infrastructure and Land Holdings Ltd, which was floated by the YSR government to promote housing and real estate around Hyderabad.
The state government took back these lands and has written to the Centre seeking cancellation of those SEZs.
Those in the cancellation list include: Pharma SEZ at China-kondur in Nalgonda district (247 acres); Textile SEZ, Amangal, Mahbubnagar (101 acres); Biotech SEZ (DIL), Desarlapalli, Medak (50 acres); Footwear SEZ, Mamidipally, RR district (100 acres); Footwear SEZ, Amangal, Mahbub-nagar (101 acres). All but one of these are with DIL.