New Delhi: Reflecting lack of enthusiasm for the special economic zones, over 40 developers including Parsvnath SEZ Ltd and Ranbaxy Laboratories have sought more time from the government for implementing their projects.
Reliance Haryana SEZ Ltd has also requested for additional time from the Board of Approval (BoA), headed by Commerce Secretary Rahul Khullar, the BoA agenda said.
BoA, a 19-member inter-ministerial body that deals with special economic zones (SEZs) related matters, is scheduled to meet on 25 March.
Another three promoters have approached the commerce ministry for surrendering their projects, citing global economic uncertainty as the reason.
Maharashtra Industrial Development Corporation has approached the BoA for surrendering its sector specific tax free enclave at Solapur, the agenda said.
Gujarat Hydrocarbons and Power SEZ Ltd, which was planning to set up a sector specific SEZ in Gujarat sought “...withdrawal of formal approval due to uncertainty in the international market and in the legal framework governing SEZs”.
According to an industry expert, uncertainty over tax exemptions to new SEZs has also led to declining interest in the tax free enclaves. Investors are very apprehensive about the new draft Direct Taxes Code (DTC).
According to the revised DTC draft, which will replace the Income Tax Act of 1961, tax exemptions for SEZs will be confined to the existing units.
The developers who have sought more time to implement their projects, include Mangalore SEZ Ltd, Ansal IT City and Parks Ltd and IFFCO Kisan SEZ Ltd.
Reliance Haryana SEZ Ltd, which is in the process of land acquisition, has requested for extension of in-principle approval up to March 2015 stating that land acquisition is a time consuming process.
It has requested Haryana government to acquire balance land for enabling contiguous land parcel of minimum 1,000 hectares so as to start development activity.
Reliance Haryana SEZ Ltd, which is planning to set up multi-product SEZ at Gurgaon at an area of 5,000 hectare, has acquired 1,060 hectares of land.
“In this case the validity of the in-principle approval has expired on March 2009. The developer has become due (for) fifth extension. BoA is to consider granting extension...,” the agenda added.
Minister of state for commerce and industry Jyotiraditya Scindia has recently said in a written reply to Rajya Sabha that as much as 203 special economic zone developers have been given more time to execute their projects.
The minister had also said that 23 SEZ developers have surrendered their projects due to the impact of global economic meltdown.
The BoA would also consider four new proposals including that of Raheja builders Pvt Ltd to set up an IT/ITeS tax free zone in Mumbai and Sterling Port Ltd’S proposal to set up port based tax free enclave in Gujarat.
SEZs have emerged as major route for attracting investments and increasing exports. So far 582 SEZs have been formally approved of which 130 are in operation.
The SEZs contributed about 26% to the country’s overall exports. Exports from these zones grew by 47% to Rs 2,23,132 crore during April-December 2010-11 over the same period last fiscal.
Shipments from SEZs increased from Rs 22,840 crore in 2005-06 to Rs 2,20,711 crore in 2009-10.
SEZ units are eligible for 100 per cent tax exemption for first five years and 50 per cent for the next five. The developers of the zones also avail 100% income tax exemption for 10 years.