Faced with poor response from entrepreneurs and unfavourable tax conditions, Ahmedabad-based home linen maker, Pradip Overseas Limited (POL) has decided to scrap its plans for the sector-specific special economic zone (SEZ) near Ahmedabad.
The company has filed a request for withdrawal of formal approval granted by the SEZ board of approval (BOA) in November 2008 and plans to develop an industrial park at the same location instead.
"The glory of SEZs seems to faded away as there is less response from investors. Also, the changes in tax conditions with imposition of minimum alternate tax (MAT) on SEZs is affecting future prospects. Hence, we have requested to the BoA to withdraw the formal approval granted to the SEZ," said a senior official at POL. The planned SEZ over an area of 109.48 hectares, is yet to be notified.
The company now plans to develop an industrial park at the same location of the SEZ, which was coming up at village Bhamasra, taluka Bawla of Ahmedabad district, Gujarat.
"We plan to set up an industrial park at the same location instead. Not only textiles but all types of manufacturing companies will set up their units at the proposed park," he said.
The BoA has taken POL's request for withdrawal of formal approval into consideration.
"The developer has stated that due to change in the terms and condition specially imposing MAT in the SEZ units, the textile SEZ is not remained the viable option for the participating entrepreneur. They are not receiving any response from the textile entrepreneurs of the country for participation in the textile SEZ," the BoA noted in its agenda for the 54th meeting to be held on September 14, 2012.
"The developer has also stated that they have not approached to GOI for issuing a notification of the land for the said SEZ," it noted.
POL shares traded flat at Rs 79.4 during early trades on Bombay Stock Exchange (BSE) on Thursday showing a marginal loss of 0.2% from previous close.