The Budget has proposed further new sops for the special economic zones(SEZs) being set up in the country. Indian as well as the foreign companieswill be eligible for a ten-year tax holiday for setting up the zones andwill also enjoy a similar dispensation in respect of their income. The SEZsare primarily conceived as magnets to attract foreign direct investment witha view to boosting exports.These new concessions will be in addition to the ten-year tax holiday onprofit earned by SEZs on their exports till 2010.
The immediate beneficiary of the finance minister's extraordinarybenevolence is the first new SEZ coming up at Nanguneri in Tamil Nadu andthe move is significant on the eve of assembly election in the state slatedfor March-April this year.
Commerce and industry had hinted at such a package for the SEZs whileinaugurating the Nanguneri SEZ early this month.
However, the budget has sought to tax profits earned on the 25 per centdomestic sales made by hundred per cent export-oriented units and unitslocated in export processing zones, free trade zones and software technologyparks.
There will be no pre-determined value addition and standard input-outputnorms for the special economic zones and a restriction-free foreign directregime barring industries reserved for the public sector and those for whichlicensing is compulsory. FDI up to 100 per cent will be permitted throughthe automatic route.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
