Budget 2014: SEZ, What happened recently?

The new Financial budget 2014-15 promises several measures for the renewal of SEZ.

SEZ, the abbreviated form of Special economic zones, are special zones demarcated by the government where normal economic laws of the country is not applicable. In other words these zones have a very liberal economic laws to promote special economic activities. India was the first country in Asia to understand the potential of SEZ and harness their value.

Numerous areas in India has been identified as SEZ and promoted in order to obtain special economic gains like tax benefits and importing and exporting easy access. Many amendments are made now and then in forms of requests from different industries to add new SEZs or to denotify the existing ones. Few requests were made in the month of August 2013 to add and denotify SEZs. Wagholi & Bhavadi, Taluka Haveli, Dist. Pune, Maharashtra over 13 hectares and two more in Navi Mumbai and Kutch, Gujarat were the proposals for new SEZ. Only the proposal for Navi Mumbai was accepted and others were deferred by the Board of Approval.  More than seven requests were made to denotify already existing SEZ. One of these proposals was declined and others were approved. The denotified SEZ belongs to Pune, Maharashtra; Gurgaon, Haryana; Raigad, Maharashtra and Jaipur, Rajasthan.

What did MAT do?

There were also recent tax changes that affected SEZ areas in a great deal. Minimum Alternate Tax (MAT) is one such tax which has made industrialists in SEZ unhappy. A MAT of 18.5% was introduced in the year 2010 – 2012. This tax should be reduced or removed. This tax has made several large scale companies like DLF, RIL and Ansal to denotify their SEZ areas. Reducing this tax will promote the economy considerably.