New Delhi: The government may have to amend the SEZ Act 2005 to align it with the Goods and Services Tax (GST) law so that central excise and service tax benefits can be extended to developers and entrepreneurs.
The Commerce Ministry is in the process of preparing a note on the changes required in the Special Economic Zone (SEZ) Act, an official said.
The duty drawback norms, under which exporter is compensated for duties suffered during the course of production of goods, too would be required to be aligned with the new indirect tax regime.
Under the present norms, units in the SEZ get exemption from service tax and the developers get exemption from customs/excise duties for development of zones for authorized operations.
"Section 26 of the SEZ Act has to be amended to align it with the GST law. There is also a meeting tomorrow with the customs authorities to discuss the movement of goods to and from SEZs in the context of GST," the official added.
The section talks about exemptions, drawbacks and concessions to every developer and entrepreneur. SEZs are export hubs which contribute about 16 per cent to the country's total outbound shipments.
The Commerce Ministry is taking steps to revive investors interest in these zones. It has asked the Finance Ministry to extend sops like rollback or reduction in the minimum alternate tax.
Exports from these zones logged a marginal growth of 0.77 per cent to Rs 4.67 lakh crore in 2015-16. It was Rs 4.63 lakh crore in 2014-15.
In the biggest tax reform since Independence, the Rajya Sabha last week approved the GST Bill to replace a raft of different state and local taxes with a single unified value added tax system to turn the country into world's biggest single market.
Published Date: Aug 07, 2016 11:10 am | Updated Date: Aug 07, 2016 11:10 am