Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: articles on VAT and GST in India :: VAT RATES :: Central Excise rule to resale the machines to a new company :: VAT Audit :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: TDS :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: empanelment :: form 3cd :: cpt
 
 
News Headlines »
 Filing income tax return to become simpler from next month
 Here's why that big tax refund isn't great news for you
 Filing tax returns to be less painful as government simplifies ITR forms
 Here’s how the new tax provisions will impact you in 2017-18
 Income-tax (3rd Amendment) Rules, 2017
 How you can save tax in the last 2 days of current FY
 6 important income tax rules for individuals which will change from April 1, 2017
 Key changes in income tax rates individuals need to look at from 1 Apr
 Provisional Enrollment under Goods and Service Tax (GST)
 Ten income tax changes that will come in to effect from April 1
 New income tax provisions you need to be aware of

Pranab to talk to PM on SEZ tax tangle
November, 07th 2008

External Affairs Minister Pranab Mukherjee, who heads an Empowered Group of Ministers (EGoM) on special economic zones (SEZs), is likely to consult Prime Minister Manmohan Singh to resolve the dispute between finance and commerce ministries over tax exemption for export profits from the zones.

The EGoM has failed to arrive at a decision on the Income Tax Acts Section 10 AA, which provides tax exemption on profits earned by units in SEZs.

While the commerce ministry wants export profits to be determined on the basis of the turnover of an SEZ unit, the finance ministry wants to take into account the companys total turnover, including from the non-SEZ units. This, according to the commerce ministry, would reduce the exemption that was promised earlier.

The group of senior ministers met on October 30 but sources said Mukherjee did not want to take a stand on the issue. Mukherjee said he would discuss with the prime minister, said a government source in the know. Decisions taken by the EGoM do not require the approval of the Union Cabinet.

The EGoM is likely to meet at a later date, probably after Mukherjee discusses the issue with the prime minister.

The issue is of great significance to firms that have presence in both SEZ and non-SEZ units. Software companies like Infosys Technologies Ltd and Wipro Ltd have presence both inside and outside SEZs. Also, income tax benefits under the Software Technology Parks of India scheme will get over on March 31, 2010, and information technology companies have been opening most of their new operations in SEZs.

SEZ units and the commerce ministry argue that the current literature of the controversial Section lowers the tax exemption that the zones are eligible for. The SEZ Act of 2005 provides the zones 100 per cent income tax deduction on export profits in the first five years of operation.

But Section 10 AA says the export profit has to be taxed in proportion to the units contribution to the companys turnover.

Companies argue that the export profit of an SEZ unit should be computed in proportion to the turnover of the unit and not the entire company. This is because the present arrangement eats into the income tax deduction.

According to sources, the commerce ministry has been arguing that this is an anomaly, while the finance ministry says this is a conscious decision. The finance ministry told the EGoM that the present arrangement will discourage shifting of existing work by companies to their SEZ units. But the commerce ministry is saying there have been no cases of misuse, said the source.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Integrated Software Solutions Integrated Software Development Integrated Software Services Integrated Software Solutions India Integrated Softw

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions