Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 8 reasons why old tax regime is still attractive for many taxpayers in this income tax bracket
 March 31 deadline is getting near. How to save income tax with tax loss harvesting?
 45-day MSME payment rule: Impact and details of Section 43B(h) explained
 Small savings schemes that offer tax benefits of up to Rs 1.5 lakh under section 80C
 RE-OPENING OF CORRECTION WINDOW FOR MAY 2024 CA EXAMINATIONS
 Powerful Upgrades, Tally 12+1 months renewal Plan and Connected Services for your growing Business - March 2024
 How innovative solutions can help fix the Sec 43B conundrum for MSMEs
 Income Tax dept asks many individuals to explain high value transactions of FY20-21 as Updated ITR deadline nears
 Release Notes for TallyPrime and TallyPrime Edit Log Release 4.1 | What s New!
 Deadline to file updated ITR FY20-21 ends on March 31: Details on additional tax
 4 tax-planning mistakes to avoid this season

Tax code: Commerce department
October, 06th 2009

The new draft direct tax code that seeks to simplify and rationalise the countrys direct tax structure has come under fire from the commerce department for its suggestions on doing away with exemptions for special economic zones (SEZs).

The department has taken up the issue with the finance ministry, pointing out that removing exemptions would render the SEZ Act ineffective, a commerce department official has said.

We have started official consultations with the revenue department on the issue of the proposed withdrawal of exemptions for SEZs. We feel that removal of exemption would shake investor confidence in India and affect flow of investments into SEZs, the official said.

Under the SEZ Act, developers are entitled to 100% tax exemption on profits for ten years in a block for the first fifteen years of operation. SEZ units are entitled to 100% tax exemption on export profits in the first five years of operations. They are eligible for 50% exemption on export profits for the next five years while for the following five years, units get up to 50% exemption on reinvested profits.

Under the proposed direct tax code, SEZ developers would be allowed to only recover capital and revenue expenditure (except expenditure on land) and would be liable to income tax on profits made thereafter.

This means that the new direct tax code, if implemented in its present form, will lead to a total switchover from profit-linked incentives. This is contrary to the provisions of the SEZ Act, LB Singhal, director-general, export promotion council for EoUs and SEZs, told ET.

In the case of SEZ units too, profit-linked incentives would be substituted by a new scheme. All this has created a lot of uncertainty. Our council gets several queries every day from developers, units and international investors seeking clarification on the future of the SEZ policy, Mr Singhal added.

The commerce department official pointed out that the department had pointed out to the finance ministry that SEZs in the country had started doing well only after the SEZ Act was put in place in 2005 and the rules were spelt out in February 2006.

While investments just trickled in the first five years since the SEZ scheme was introduced in 2005, there was a surge in investments only when the act was implemented. SEZs have attracted of Rs 1,00,000 crore in investments so far and have led to the employment of several lakhs of workers, the official said.

The draft direct tax code put in place by the revenue department is being discussed extensively by various departments and ministries of the government and the industry. The finance ministry will hold a meeting with major industry chambers on October 9th to get their inputs on the draft.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting