Parsvanath group permitted to withdraw six SEZs
Government today allowed realty major Parsvanath group to withdraw its six SEZ projects in different states, as a fall out of imposition of Minimum Alternate Tax and uncertainty over continuation of tax sops to Special Economic Zones.india Updated: Jul 22, 2011 15:11 IST
Government today allowed realty major Parsvanath group to withdraw its six SEZ projects in different states, as a fall out of imposition of Minimum Alternate Tax and uncertainty over continuation of tax sops to Special Economic Zones.
The clearance for the Parsvanath SEZ Ltd (PSL) pull-out of its projects was given by the inter-ministerial Board of Approval,which met here under the chairmanship of commerce secretary Rahul Khullar.
Besides, the BoA permitted extension of time to 45 developers, including those of the Rahejas, Mukesh Ambani-promoted Navi Mumbai and GP Realtors to implement their projects.
Several of the SEZ notified projects are grappling with the problems of land acquisition even as they face uncertainty over the tax regime, sources said.
The Parsavanath group has withdrawn its projects in different sectors like handicrafts, gems and jewellery, food processing and automobile componets. These projects were to come up in in Uttar Pradesh, Rajasthan, Haryana, Tamil Nadu and Maharashtra.
The SEZs which were touted as major vehicles for investment and export promotion were allowed a host of tax exemptions under a special SEZ Act of 2005.
The initial phase saw developers lining up in big numbers for the projects. It was also seen as a real estate opportunity. However, following concerns about loss of tax revenue, by the Finance Ministry, the government has proposed phasing out of the tax sops for the units commencing operations after 2014.
Moreover, farmers protests against land acquisition has become a major problem.
The industry has also expressed concern over the imposition of Minimum Alternate Tax (MAT) of 18.5% on the book profits of SEZ developers and units therein.
Under the law, incentives for SEZ units include 100% income tax exemption on export profits earned for the first five years, a 50% for the next five years and another 50% exemption on re-invested profits in the following five years.