SEZ To Claim Service Tax Refund - March 5, 2009

The government has permitted companies situated in Special Economic Zones (SEZs) to claim service tax refund for services done outside the tax-free export zones too. SEZ developers are also permitted to do the same. The benefit would flow in the shape of "refund of service tax" and not through an exemption.

As per previous norms, if a unit was transporting raw material from a port located outside the SEZ, service tax would have to be paid. Now the unit will be able to apply for refund. The refund will be allowed only for services that are related to authorized operations like activities within SEZs.

Along with this, there is one more change regarding services provided between units located within an SEZ. Earlier, this was exempted but now firms have to claim refund instead of blanket exemption.

L B Singhal, director general of Export Promotion Council for Export Oriented Units (EoUs) and SEZs, greeted the decision and said to reveal some issues, "Service tax has to be paid first and then refund has to be claimed. It would result in unnecessary blockage of funds, paper work and transaction costs. Hence it would be appropriate if exemption could be provided."

SEZ Anctioned Formal Approval For Commissioning - Aug 04 , 2008

The Board of Approval for Special Economic Zones (SEZ) sanctioned formal approval for commissioning of a multi-product SEZ in Tirunelveli district, Tamil Nadu spread over an area of 1,020 hectares, besides granting a clutch of 22 formal approvals and six in-principle approvals. The multi-product SEZ in Tamil Nadu is a joint venture between Tamil Nadu Industrial Development Corporation (TIDCO) and AMRL International Tech City Ltd.

The BoA, chaired by the Commerce Secretary, Mr Gopal K. Pillai, considered a total of 34 proposals for setting up of SEZs including three proposals for conversion of in-principle approvals into formal approval. Among the 23 formal approvals granted today include four IT/ITES SEZ in Kerala by the State Information Technology Infrastructure Ltd, two IT/ITES Electronic Hardware SEZs in Andhra Pradesh by Godrej Real Estate Pvt Ltd and S2tech.com Pvt Ltd, two bio-technology SEZs in Andhra Pradesh and one IT/ITES SEZ in Tamil Nadu by DSRK Holding Pvt Ltd.Among the six in-principle approvals granted were multi product SEZ in Madhya Pradesh, airport/aviation sector (including MRO) SEZ in Tamil Nadu by Taneja Aerospace and Aviation Ltd, a free trade warehousing zone SEZ in Tamil Nadu by Vikram Logistics and Maritime Services Pvt Ltd.

SEZ Talk Over 18 Proposals For Clearance : Postponed

The Board of Approvals for Special Economic Zones (SEZ), which met on May 1 to talk over 18 proposals for clearance, postponed decision till May 16 when it would meet again. The BoA, which met under the chairmanship of the Commerce Secretary Mr Gopal K.

Pillai, had several important SEZs, comprising the Bangalore International Airport SEZ, two SEZ proposals at Noida and Pune each by DLF Ltd and two SEZs of Ansal Properties and Infrastructure Ltd in Lucknow, Uttar Pradesh. So far, 453 formal clearances for opening SEZs have been agreed under the SEZ Act, 2005, out of which 210 SEZs have been notified. These cover multi-product and sector-specific SEZs for manufacturing industries in areas such as textiles and apparels, leather and footwear, gems and jewellery, engineering, agro and food processing industry pharmaceuticals and chemicals.

SEZ Exports Likely To Touch Rs 1,25,000 Cr In 2008-09

NEW DELHI: Despite initial reservations of the finance ministry, they are proving to be key engines of export growth. The government expects exports from special economic zones (SEZs) to touch Rs 1,25,000 crore during 2008-09, an increase of more than 86% over the last fiscal.

“The government sees SEZs as vehicles of industrialisation and employment generation,” commerce minister Kamal Nath said while announcing the Foreign Trade Policy for 2008-09 here on Friday. In the last three years, the exports from SEZs have shown an increase of over 150%. It is projected that the exports from SEZs would reach Rs 1,25,000 crore by the end of 2008-09.

According to government estimates, export gains from SEZs in 2007-08 would total to about Rs 67,088 crore, a growth of 200% over two years. Exports from SEZs in 2003-04 was just Rs 13,854 crore. SEZs currently provide employment to more than 2.8 lakh people. According to government data, till December 2007, newly-notified SEZs provided employment to about 61,000 people. Meanwhile, private sector provided employment to about 36,463 people as per the data available till December 2007. Companies operating in these zones include Nokia, Mahindra and Mahindra and Wipro.

The incremental employment generated by these SEZs since February 2006 is 1.5 lakh. Of this, about 61,000 have found employment in the newly notified SEZs, private SEZs and government owned SEZs have given employment to to around 85,000.

Pointing out the massive increase in exports and employment, the minister said: “Development of this nature reassures us of the validity of the basic policy relating to SEZs, notwithstanding the scepticism expressed by a few persons.”
According to the pre-budget Survey, exports from the tax-free zones increased to Rs 34,615 crore in 2006-07 from Rs 22,840 crore, regisetering a growth of 52%.

Till now the government has granted 453 formal approvals for setting up of SEZs, of which 207 have been notified, while others are at various stages of implementation and operation. The minister also said that approvals are not restricted to a few states but spread over 19 states and 3 union territories.

The new SEZs have come up in all the sectors like engineering, textiles, IT, telecommunication, multi-products, shoes, gems & jewellery, non conventional energy, bio technology and pharmaceuticals. The news SEZs have come in states like Tamilnadu, Rajasthan, Gujarat, Andhra Pradesh, Punjab, Uttar Pradesh, Maharashtra and Karnataka.

No Review Of SEZ Policy: Kamal Nath

New Delhi: The Government has said that it does not have the immediate plan to review the special economic zone (SEZ) policy. This was said by the Minister for Commerce and Industries, Mr Kamal Nath, here on Jan 16.

Speaking to reporters at the sidelines of CII Partnership Summit, Mr Nath said, it has generated employment. It has generated investments. Also, it is an Act of the Parliament. I do not think there is any need to review the policy, he said.

Regarding the Goa Government''s request to scrap all the 15 approved SEZs in the State, Mr Nath said that his Ministry was examining the proposal. Goa had announced scrapping of all the 15 SEZs in the State on December 31, 2007. By then three projects, including one from pharmaceutical company Cipla, had already been notified. A senior official in the Ministry said that The Board of Approval (BoA) for SEZs is expected to meet sometime in February to consider Goa Government''s request. However, the official pointed out that while it would not be much of a problem for the Centre to accede to the State Government, the problem would arise in case of the three SEZs that have already been notified and promoters have started putting in their investments.