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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08.21.06
Posted in News, investment, SEZ, Service Tax, Exemptions, Information Technology, Automobiles, Biotechnology, Pharma at 7:21 am by Mridul
Lupin planning SEZ in India for themselves
Lupin, a global market leader in API and formulations in the Pharma Industry, is planning an SEZ in Maharashtra. The initial investment would be Rs 200 crore, which may go up to anywhere between Rs 400 crore and Rs 500 crore. The company has been heard for hunting land in Maharashtra. When asked to a senior official, he said that the company is would like to set up a manufacturing plant inside the SEZ and would not sell space to others. “We propose to put up a manufacturing plant inside the SEZ, but, in no way, are we going to develop it for the use of others,” a source said.
Our Review: With more and more SEZ coming up in the India, India would definitely be the preferred commercial hub of the world. The incentives that the government is giving in the SEZ would attract the foreign investments also. With Service Sector also waiting to get the incentives, more and more service providers outside India would prefer Indian companies to provide services at low costs.
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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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