The Board of Approvals (BoA), chaired by Commerce Secretary Rahul Khullar, today approved K Raheja Universal's request to scrap its Navi Mumbai SEZ and also allowed 23 developers more time to develop the tax-free industrial enclaves.
In addition, the board also gave its nod to partially scrap another special economic zone (SEZ) developed by the Mumbai-based realtor K Raheja Universal.
The company cited economic slowdown as the reason for its inability to develop both the zones, which were notified by the commerce ministry.
Notification is the final step that allows the SEZ to enjoy tax and duty benefits.
Though there are no provisions for denotification of zones in the SEZ Act or rules till now, the law ministry had told its commerce counterpart that the board has the power to denotify SEZs with the condition that the developer will have to give back the government all the benefits it availed while constructing it.
K Raheja Universal's told the board that it had not developed the zones and hence, had not availed any duty benefits.
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In its earlier meeting on June 2, the board had given conditional approval to DLF for scrapping four of its notified SEZs.
In today’s meeting, which took up the leftover agenda of the previous meeting, the board also gave additional time of one year to 23 developers to build the SEZs.
These include three SEZs proposed to be developed by fraud-hit Satyam Computer Services that has been recently acquired by Tech Mahindra.
The pace of development of the zones have slowed down considerably, owing to lesser demand for SEZ space, high cost of borrowing and land acquisition problems.
Prospective clients of the zones have put their expansion plans in the back burner, which has made developers go slow on their construction.
The board also approved proposals by Shyam Steel Industries and Limitless Properties for building two zones related to information technology in West Bengal.
At the moment, there are 90 functional zones out of about 570 SEZs, which have been formally approved since February, 2006.
Metro rail to pass through DLF zone in Gurgaon.
The BoA today gave its nod to a proposal by DLF Ltd, the Delhi-based realtor, to let the metro corridor from National highway-8 to Sikandarpur to pass through the Cyber City SEZ in Gurgaon.
The corridor will be built through a public-private partnership by the Haryana Urban Development Authority (HUDA) and a consortium of ITNL ENSO Rail Systems Ltd. (IERS), IL&FS Transportation Networks (India) Limited (ITNL) and DLF.
The developer has assured that no tax benefits will be availed while building the elevated corridor through the zone. Moreover, the corridor will not lead to problem in contiguity — a mandatory condition for SEZs — because of its elevated status.