The Financial Express reported that Special Economic Zones are likely to get total exemption from tax on their profits soon.
Empowered group of ministers were to take up the issue of totally exempting the export profits of SEZ units from income tax for a tax holiday period of 5 years.
Currently, the particular provision that deals with this issue of tax on export profits of SEZ units is Section 10AA of the Income Tax Act. This Section accords income tax exemption to the SEZ Units on the export income. But, as per the Section, export turnover of the unit is divided by the total turnover of the assessee while calculation of exemption from export profit.
Among other matters that were on the agenda are the definition of what constitutes a vacant land, categorizing SEZs as core sector projects, exempting SEZ units from Minimum Alternate Tax, doing away with export duty on supply of steel to SEZs as well as extending Cenvat credit facility to SEZ developers.