"We have been telling the Finance Ministry and we have recommended strongly the withdrawal of MAT and DDT and restoration of the situation as it was," Commerce Secretary Rajeev Kher told reporters here.
He said that special economic zones (SEZs) are potential tools of industrial development, manufacturing and exports.
Recognising this potential, "we feel that the whole instrumentality of SEZ requires augmentation," he added.
"So, we feel that those impositions should be done away with as this will liberalise the environment around SEZs so that entrepreneurs will make investments which will lead to manufacturing and employment generation".
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The industry also has said that MAT and the dividend distribution tax (DDT) on SEZs have dented the investor friendly image of these special zones.
In 2011, government had imposed 18.5 per cent MAT on the book profits of special economic zone developers and units.
SEZs, which are major export hubs, contribute about one- third to the country's total exports. They provide employment to about 15 lakh.
Of the 566 formally approved SEZs, only 185 are in operation. Exports from these zones increased from Rs 22,840 crore in 2005-06 to Rs 4.94 lakh crore in 2013-14.
When asked whether Commerce and Industry Minister Nirmala Sitharaman's also being the Minister of State for Finance would make it easier for commerce ministry proposals and policies to be facilitated, he said :"I am sure the government has thought about that angle".