eGOM on SEZs to meet on April 29 over taxes, sops

With the unrest on special economic zones (SEZs) petering out, an empowered Group of Ministers (eGoM) is likely to meet here on April 29 to resolve many of the issues faced by the SEZs, mostly relating to taxation and export incentives.

However, the eGoM, headed by External Affairs Minister Pranab Mukherjee, is not likely to take up the contentious demand of developers to lift the 5,000 hectare land ceiling, a senior official said.

"The land issue is not likely to come up, especially because Parliament would be in session. We do not want to rake up the SEZ debate again when it is all quiet now," he said.

While the commerce ministry officials have called a meeting on April 30 of developers from Goa whose SEZ projects were scrapped by the state government, the issue may also be discussed at the eGoM meeting.

The issues that need to be resolved by the eGoM include tax exemption on services given outside the SEZ by units in the zone, tax rebates on consignments shipped to the zones from the Domestic Tariff Area and the formula for calculation of income tax exemption on export income of the SEZs.

The government has so far granted 453 formal approvals for SEZs, out of which 207 have been notified and are at various stages of implementation and operation.

Exports from SEZs are expected to touch Rs 1,25,000 crore during 2008-09, an increase of more than 86 per cent over the last fiscal. During April-December 2007, exports from the tax-free zones totalled Rs 40,000 crore, while fresh investment of Rs 67,347 crore has flown in as on March 2008.

Commerce and Industry Minister Kamal Nath recently brushed aside "scepticism" on SEZs saying, "development of this nature reassures us of the validity of the basic policy".