India Inc bats for end of MAT

New Delhi: To revive the special economic zones, industry has urged commerce ministry to restore the policy for SEZs to its original form and immediately withdraw minimum alternate tax and dividend distribution tax to regain trust of domestic and global investors.

SEZs were conceived as tax free enclaves with world class infrastructure for exporting only goods and services from units set up in them without carrying the incidence of various direct and indirect taxes, duties and levies to provide Indian exports a strong competitive edge in global markets, said industry chamber Assocham.

However, it said that imposition of MAT and DDT by the government a few years after the announcement of SEZ policy took investors by surprise followed by a fall in their interest thereby raising questions about government’s commitment to a stable policy regime.

“Creation of additional infrastructure in approved SEZs without exemptions, concessions and drawback is also imperative as additional benefits would flow through decongestion of overcrowded cities and creation of alternated urban satellite centres would provide new streams of revenue for governments and local bodies,” said a paper on ‘Suggestions to Revive Special Economic Zones’ prepared by Assocham.

“If immediate action is taken by implementing these corrective measures it would restore investor confidence and bring back SEZs to the forefront of economic and industrial development. Restoring confidence of domestic manufacturing sector by providing a stable policy environment would promote competitiveness as SEZs can be the vehicle to boost manufacturing exports from India and catalyse revival of Indian economy,” said D.S. Rawat, secretary general, Assocham.