The government is not in favour of brining a retrospective sunset policy in the SEZ review, hinted commerce Minister Nirmala Sitharaman at the Loksabha. The commerce Minister added that government will not hurt the industry by imposing a retrospective withdrawal of an already declared tax concession like the sunrise clause.
India’s SEZs are slow performers on export front compared to similar industrial and export agglomerations abroad.
In a recent statement in the Parliament, the Minister stated that ‘special economic zones (SEZs) have seen a slowdown in terms of exports, increased number of applications for denotification, slower operationalisation and fewer number of requests for setting up new zones.’
Nearly 138 SEZ developers have sought and granted more time to complete their projects in the last four years.
“The slowdown may be due to a number of reasons including withdrawal of exemption from minimum alternate tax (MAT) and Dividend Distribution Tax (DDT) provisions, uncertain fiscal regime for SEZs and global slowdown in exports,” she said in an early reply.
SEZ policy review is made periodically and in the context of the recent slowdown, the government is expected to give some extra push at least for the medium term to raise exports. India’s exports have registered continuous 15-month decline conditioned by global recession.