Investors say DTC spells death for SEZs

HYDERABAD: The Direct Tax Code (DTC) Bill, which has been approved by the Central cabinet and sent to  Parliament, is giving sleepless nights to investors, especially those who have set up industries in the Special Economic Zones (SEZ). They strongly feel   that implementation of the DTC will corrupt the entire concept of SEZs.

Speaking at an open house of Export Oriented Units (EOUs) and SEZs for developers and investors in Andhra Pradesh here today,  industrialists expressed concern over the DTC implementation and the proposed changes in the SEZ policy. Export Promotion Council for EOUs and SEZ (EPCES) chairman Rakesh K Sonthalia said that the DTC will adversely affect the SEZ policy which is aimed at attracting long term investments through attractive incentives to developers and industrialists. ‘’Implementation of DTC will neutralise the benefits being extended to investors in SEZs,” Sonthalia told Express. He argued that why would an industrialist establish an industry in an SEZ when there is no difference in benefits being extended to him when compared to elsewhere in the state.

According to investors, several developers have started approaching the Central government for denotification of their SEZs soon after the Cabinet approved the DTC and sent it to  Parliament. The new tax code is expected to widen the tax base, end several exemptions and moderate tax rates. The EPCES is also strongly pursuing the issue with the Central government and is also planning to take up the issue with the parliamentary standing committee which will look into the DTC Bill before presentation in the Parliament. The SEZ developers also expressed concern over collection of high per centage (25 per cent) of Minimum Alternative Tax (MAT).

Reacting to their concerns, additional secretary for Union ministry of commerce DK Mittal assured them that the Parliamentary Committee will take a reasonable decision on the DTC and invited the industrialists to express their concerns before the Parliamentary Committee.  “Fiscal regime, world-class infrastructure and single window clearance for industries are foundations of the SEZ Act. The government will do needful to encourage investors to set up industries in the SEZs,” he assured. Principal secretary for industries BP Acharya, principal secretary for information technology and communications K Ratnaprabha, Andhra Pradesh Industrial Infrastructure Corporation (APIIC) managing director BR Meena and other officials cleared the doubts and issues raised by the investors at the meeting.