Government today said it is considering various measures, including resolution of issues concerning minimum alternate tax (MAT), in a bid to boost exports and manufacturing in special economic zones.
"We are thinking of some specific steps for SEZs. Commerce and Revenue Secretaries are already discussing the matter that includes MAT and dividend distribution tax (DDT) and dual use of infrastructure in SEZs," Commerce and Industry Minister Nirmala Sitharaman told reporters here.
In the last ten years, she said, there has been only hue and cry on these zones.
Commerce Secretary Rajeev Kher said the government is extremely sincere and determined to deal with the obstacles which have come in front of SEZs.
"They (obstacles) are in the nature of taxation policies, dual use of infrastructure in processing and non-processing areas," he said, adding that the Commerce Ministry is in consultations with the relevant departments to "give a clear indications of the incentives the government wants to give to SEZs".
SEZs play a significant role and contribute about 25 per cent to the country's total exports.
"In the last couple of years, SEZs went into stagnation," he said.
Investments in SEZs, which are major export hubs, started coming down after imposition of MAT and DDT. The industry has been complaining that that MAT and the DDT have dented the investor sentiment and also implementation of the scheme.
In 2011, government had imposed 18.5 per cent MAT on the book profits of special economic zone developers and units.
Exports from these zones increased from Rs 22,840 crore in 2005-06 to Rs 4.94 lakh crore in 2013-14.
An official statement said that an extensive review of SEZs for re-energizing manufacturing-led exports is on.
"Decisions on modification of MAT and DDT and the dual use of infrastructure in non-processing areas, these proposals are in active consideration.
"Other issues such as those relating to service tax, extending the tax holiday for the pharmaceutical industry are being actively pursued," it said.
Kher also said the Centre is taking steps including full involvement of state governments for mainstreaming of exports activities.
Commerce Minister Nirmala Sitharaman has written to the Chief Ministers of the states suggesting that they oversee the task of mainstreaming their states.
State governments have been advised to appoint an Export Commissioner for coordination of all export-related activities, he said.
