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Commerce ministry hopes for tax benefits to SEZs in budget
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SME Times News Bureau | 11 Feb, 2016
Commerce ministry on Wednesday
expressed hope that the forthcoming union budget will incorporate the
ministry's suggestions on granting tax benefits for special economic
zones (SEZs) towards reviving the country's exports.
Responding
to queries from reporters on the sidelines of the industry chamber
FICCI-organised India-Africa Agribusiness Forum on the commerce
ministry's suggestions on tax issues of SEZs, Commerce Secretary Rita
Teaotia said: "We hope to.. we have made our submissions."
India's
merchandise exports fell for the 13th straight month in December and
were valued at $22.29 billion against $26.15 billion in the like month
in the previous year, as per official trade data released on Monday.
The commerce ministry has suggested the removal of minimum alternate tax (MAT) on special economic zones in the budget.
Representatives
of exporting industries told the government last month that levy of
minimum MAT and dividend distribution tax (DDT) on SEZs have dented the
investor-friendly image of SEZs and created uncertainty in the minds of
both foreign and domestic investors.
"Imposition of MAT and DDT
on SEZs has dented the investor-friendly image of SEZs, created
uncertainty in the minds of foreign and domestic investors, and has
adversely affected the growth, investments, employment and exports from
SEZs in India and resulted in loss of valuable foreign exchange earning
of the country," Export Promotion Council for EOUs and SEZs chairman
P.C.Nambiar told Commerce Minister Nirmala Sitharaman, according an
official release.
He had requested that MAT should be totally withdrawn or at least reduced to its original rate of 7.5 percent, it added.
Meanwhile,
the Confederation of Indian Industry (CII) said on Wednesday that the
move to impose MAT and DDT would not be conducive for the practical
viability of units operating in SEZs, and the "SEZ Act needs immediate
remedial measures".
"Sanjay Budhia, co-chairman, CII National
Committee on International Trade Policy, has strongly suggested and
asked the government to allow one-time 100 percent income tax holiday
for five years for all manufacturing units in SEZ," CII said in a
release here.
"This will go a long way in motivating exporters to enhance and promote exports through their units in SEZ," it added.
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