• facebook
  • twitter
SEZ Horizon SEZ Enquiry Advertise with us

NEW DELHI: It could be a second innings for special economic zones, especially those held up for years, with the commerce department proposing fresh tax concessions and a cut in the minimum area requirement to a quarter of the present specifications.

The department has suggested that any zone that is not built around the identified 40 million-plus cities and state capitals would be eligible for duty benefits on capital investment for construction of hotels, hospitals, schools and colleges, residential and business complexes and training, leisure and entertainment facilities in what is billed as nonprocessing area (NPA) infrastructure.

Sources said the zones would be eligible for tax concession if built 50-100 km from an urban conglomerate, with the facilities for exclusive use of SEZ employees.

In case of SEZs constructed in 123 backward districts, this infrastructure can also be used by those who are not part of the zone, a 48-page note said. At present, an NPA can't exceed half the area of an SEZ.

In addition, the department wants to extend the benefits of export schemes already available to entities outside the zones to SEZ units as well. This is aimed at making up for the levy of minimum alternate tax and withdrawal of other tax concessions by finance minister Pranab Mukherjee last year.

Further, nearly half the funding available under Aside, a scheme to build infrastructure for exports, may be allocated for building connectivity and infrastructure in SEZs. According to the commerce department, since February 2006, 585 SEZs have been approved and 381 have been notified.

Exports from all SEZs put together amount to Rs 3 lakh crore over six years, over 28% of shipments from the country. In all, over Rs 2 lakh crore has been invested in SEZs so far and over 7 lakh people are employed in development and running of the zones and companies located there.

GOVT mulls new normsThe number could have been much more but several projects ran into land acquisition hurdles. To tide over the land problem, the commerce department has proposed not just cutting the minimum area requirement but also changing the rules for contiguity.

If the department's proposal goes through, a multi-product SEZ could be built over 250 hectares instead of the minimum floor area of 1,000 hectares at present (see table). In case the zones are planned in the special-category states, which include the North East and the hill states, the minimum area requirement is proposed to be cut from 200 hectares to 50 hectares.