Special Economic Zone Exports Up by 67 Percent
Jul. 20 – Special economic zone exports in India increased by 67 percent to Rs. 587.5 billion for the first quarter of the financial year compared to the same period last year.
Top special economic zone exports included information technology, IT hardware, petroleum, engineering, leather and garments. Exports from the zones have continued to show strong growth. From 2009 to 2010, SEZ exports increased by more than 122 percent.
There are currently 578 SEZs in India but only 111 are operational.
With the new draft direct tax code expected to be released soon, SEZ developers and units are worried about regulations that would cut income tax benefits for new SEZ units.
The SEZ Act allows units to avail of 100 percent income tax exemption on export income for the first five years, 50 percent for next five years thereafter and 50 percent of the ploughed back export profit for the next five years. SEZ units are also exempt from central sales tax, service tax, state sales tax and other levies given by the state government.
The act was announced in April 2000 with the goal of making SEZs a stimulus for economic growth under a minimum of regulations.
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