| Once
the proposed SEZ Act is enacted, the commerce department
will regulate not just the development, operation
and maintenance of SEZs, but will also be in charge
of framing all policies including the fiscal regime,
investment policy and the legislative framework
for the SEZ. The fiscal concessions available to
SEZs would then flow from the new law, rather than
the customs, excise and income tax laws as is the
case now. |
Our Say |
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| The
Cabinet note on the SEZ bill has proposed
deletion of Chapter 10 A of the Customs
Act. The provisions of this chapter
on SEZs will be incorporated in the
new SEZ legislation. Similarly, all
provisions on income tax deductions
for the SEZs (such as 10 A and 10 B
of Income-Tax Act 1961) will be shifted
to the SEZs Act. This will impact foreign
companies as tax sparing benefits in
certain treaties for exchange with Singapore
may be lost. |
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The
commerce department will have overriding powers
as tax authorities will require authorization from
the development commissioner (DC) concerned for
audits, searches and so on. The office of the DC
will be the 'single window' for all clearances regarding
policy and procedures.
According
to government sources, the exemptions mooted in
the SEZ bill are contrary to those
agreed |
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upon by the finance ministry. New concessions are
being added. Moreover, the commerce department need
not seek a clearance from the finance ministry for
future fiscal concessions to be granted to the SEZs.
As of now, all tax exemptions have to be ratified
by the revenue department.
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