In a major move that will have revenue implications for Special Economic Zones, states said they are not going to exempt non-processing areas in these zones from state taxes.
"Empowered Committee of state finance ministers on VAT unanimously feel that in non-processing zones of SEZs, no one should impose on states anything relating to states tax exemptions," VAT panel Chairman Asim Dasgupta told reporters.
"In other words, we are against any state tax exemption in any non-processing part of SEZs," he said after the VAT panel meeting.
When asked that many states have come out with SEZ policy giving exemptions on overall SEZs, he said, "What happened has happened. We are now of view that non-processing zones of SEZs, no one should impose on states that they have to give tax exemptions," he said.
The Union Commerce Ministry has written to states to provide tax exemptions to SEZs, officials in the VAT meeting said.
When asked whether the view of states are in conformity with the Centre's SEZ Act, Dasgupta said," Yes, it is, but if it is not, we are communicating our views to the Centre because it is unanimous views of all states." A union finance ministry official also said the views of states are in line with the SEZ Act.