08.25.06
Posted in Review, India, investment, SEZ, Act, Government, Information Technology, Real Estate at 3:44 am by Mridul
SEZ Caps: Central and State governments stands against each other.
So the SEZ war is on between the Central and the State Governments. PRESSURE is building on the central government from states for removal of the ceiling on SEZs by the empowered group of ministers (eGoM). The EGoM, which is meeting on Wednesday to review the cap, has to take the crucial decision on whether to maintain the cap at the original level, increase it, or do away with it.
State Ministers, Sharad Pawar, TJayanidhi Maran, Naveen Patnaik have been writing to the Central Government for this issue. They have asked the Government that the SEZ proposals for Maharashtra cannot be accommodated if the ceiling is not removed leading to loss of potential investment. With the commerce department formally approving 46 new SEZ proposals on Tuesday, the limit of 150 imposed by the EGoM has been exhausted, which has brought the State Ministries to react against the EGoM. The Orissa CM pointed out that his state, which had become an important investment destination for minerals and metals, IT and IT-enabled services, would lose out if the SEZ cap was not removed. He said Orissa was not as fast as many other states in getting sanctions and there should be fair and equal opportunities for all states in the sanctioning process.
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08.22.06
Posted in Review, News, India, investment, SEZ, Exemptions, Act, Information Technology at 11:27 pm by Mridul
Newly proposed policies by the Ministry of Finance for Special Economic Zones (SEZ)
So the Finance Ministry has come up with THEIR approach for the Special Economic Zones (SEZ’s). The Ministry has the following points to say:
(1) The New Units that are going to come up in these Special Economic Zones will have to make fresh investments in the Plant and Machinery i.e. they cannot shift their existing machinery into the SEZ.
(2) The Companies in the Special Economic Zones cannot trade the goods via the DTAs (Domestic Tariff Areas).
(3) Trading activities can only be carried out by those companies that are importing the good and reexporting them.
Now, the basic idea behind the SEZ is to attract investments, create infrastructure and employment and generate economic activities.
Our Review: Well, these points have both advantages and disadvantages for the developer and the companies opting to put up units in the special economic zones. The original equipment manufacturer will defiantly be a gainer in these conditions, since there will be no traders sitting up in these zones, so the manufacturer will be benefited by the tax sops. The developer will have to allot the units to the OEM’s only. So the developers may feel a little pinch from the real estate point of view in their SEZ’s. Well, what we feel is that there is nothing much to worry about. Because our country has got a good number amount of manufacturers and exporters right !!!!
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08.19.06
Posted in Review, News, India, investment, SEZ, Service Tax, Exemptions, Act, Government at 6:17 am by Mridul
Service Tax breaks to SEZ in pipeline
The Ministry of Industry and Commerce is now planning to give service tax breaks to the companies opting to set up their units in the Special Economic Zones around the country. The companies which are already exempted from Service Tax in these SEZ’s are the companies that provide the services within the Special Economic Zone. Now the service providers having their units in SEZ will get this benefit too if this notification is issued. The export promotion council for EOUs and SEZ’s has taken up the issue with the government saying that “The SEZ Act clearly states that so long as a service is related to an authorised operation in an SEZ, exemption from service tax should be provided irrespective of where it is rendered.
Our Review: See, the Act is under and with the Government only and we feel that this Act is going to face amendments soon. How could be the finance ministry be happy with the Act when there is nothing that the government is getting from it. If it was upto the government, they would act as a sleeping partner in all the commercial activities going in the country.
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