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No tax exemptions in non-processing zones of SEZs: states

States on Saturday said they are not going to exempt non-processing areas in SEZs from state taxes.

business Updated: May 05, 2007 18:20 IST

In a major move that will have revenue implications for Special Economic Zones, states on Saturday said they are not going to exempt non-processing areas in these zones from state taxes.

"Empowered Committee of state finance ministers on VAT unanimously feels that in non-processing zones of SEZs, no one should impose on states anything relating to states tax exemptions," VAT panel Chairman Asim Dasgupta told reporters.

"In other words, we are against any state tax exemption in any non-processing part of SEZs," he said after the VAT panel meeting.

When asked that many states have come out with SEZ policy giving exemptions on overall SEZs, he said, "What happened has happened. We are now of a different view," he said.

The Union Commerce Ministry has written to states to provide tax exemptions to SEZs, officials in the VAT meeting said.

When asked whether the view of states are in conformity with the Centre's SEZ Act, Dasgupta said, "Yes, it is, but if it is not, we are communicating our views to the Centre because it is the unanimous view of all states." A union finance ministry official also said the views of states are in line with the SEZ Act.

First Published: May 05, 2007 18:12 IST