Mumbai: In a major relief to developers and promoters of special economic zones (SEZs) as well as manufacturing units operating within these enclaves in Maharashtra, the state cabinet on Tuesday decided to offer exemption in stamp duty and registration fees for 25 years.
The decision means the SEZ developers, promoters, and industrial units operating in the SEZs would get a waiver of stamp duty and registration fees for another 15 years.
The Maharashtra government had in March 2007 decided to give this exemption for 10 years. Now, the state government has extended the waiver by another 15 years with the aim of fuelling industrial growth and generating employment within SEZs and ancillary units, according to a cabinet note.
The waiver would be applicable to the first sale deeds signed between land owners and SEZ developers or between industrial units. The waiver would be applicable for 15 years from the date of approval of the SEZ, the cabinet note said.
The Central SEZ Act of 2005 authorizes the Union government to grant waiver in central government taxes for SEZ developers, promoters, and business set up in SEZs. Section 50 (sub-clause A) of the same act allows state governments to offer tax exemptions as well. “The state government used this provision in 2007 to exempt SEZ developers and promoters from payment of stamp duty and registration value. The centre had approved this exemption for ten years from 2007. We have decided to extend it by another 15 years," said an industry department official requesting anonymity.
The cabinet note says the decision was necessitated by the fact that several SEZs in the state, including the Multi-Modal International Hub Airport at Nagpur (MIHAN), have completed ten years since approval and become ineligible for the waiver. “The end of the waiver period has effectively disincentivized these SEZ developers from scaling up their operations. This waiver was one of the key incentives offered in the SEZ policy of the state government also. Lack of exemption also discouraged prospective SEZ developers from coming forward and investing," said the industry official.
The MIHAN project and adjacent SEZ at Nagpur has been the pet project of chief minister Devendra Fadnavis and Union minister for transport and shipping Nitin Gadkari. Fadnavis is a state legislator from Nagpur while Gadkari is the member of Parliament from the same city. According to the Union ministry of commerce website, Maharashtra has 27 SEZs notified under the Central SEZ Act of 2005. The state ranks third in the highest number of SEZs after Tamil Nadu, which has 31, and Telangana which has 30 SEZs notified under the SEZ Act.