The federal government is inspecting a proposal from SEZ builders to permit them to retain a part of the tax sops they acquired for widespread infrastructure in demarcated IT/ITeS SEZs that may be accessed by each SEZ items and non-SEZ IT/ITeS companies, sources have stated.
“SEZ builders have sought clarification from the federal government on whether or not they should return your complete tax advantages they availed for constructing infrastructure within the widespread space of IT/ITeS SEZ items, comparable to lifts or cafeterias, that they select to partially denotify. The builders need to persuade the federal government to permit them to repay tax concessions solely proportionate to the world that they de-notify,” a supply monitoring the matter informed businessline.
The Commerce & Trade Ministry, nonetheless, is hesitant about moving into complexities comparable to “proportionality” because it might result in evaluation issues, the official added.
The Centre lately amended the Particular Financial Zone (SEZ) Guidelines to permit demarcation of a portion of the built-up space in an IT/ITeS SEZ as a non-processing space, topic to situations together with reimbursement of tax concessions attributable to the world.
Tax advantages
This additionally got here with a caveat that tax advantages from the creation of social or industrial infrastructure and different services, if proposed for use by each SEZ items and people within the non-processing space, have to be repaid primarily based on a certificates issued by a chartered engineer.
“What the builders say is that if they’re denotifying two flooring in an IT/ITES SEZ constructing comprising 10 flooring, then they’re mainly denotifying 20 per cent of the world and must be requested to repay tax advantages for widespread space infrastructure in the identical proportion. The issue is that the federal government desires to take a choice whereby the interpretation of the assessing officer is diminished to the minimal,” the supply added.
The federal government’s choice to permitting co-existence of SEZ items and non-SEZ IT/ITeS enterprise in the identical SEZ premises has been largely welcomed by builders who can now optimally utilise the vacant area in present SEZs.
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