The 100% export-oriented units (EOUs), which are slated to lose income tax exemptions from 2009, might have reasons to hope. Although the finance ministry has rejected all proposals made so far for removing the Sunset Clause under Section 10B of the Income Tax Act so that EOUs continue to avail the exemption from income tax, the commerce department is not willing to give up. Commerce & industry minister Kamal Nath has said he has taken up the issue not just with the finance minister, but also with the prime minister.

Speaking at the awards function of the Export Promotion Council for EoUs and SEZs, the minister said he was aware that the benefits of the relief package announced on account of rupee appreciation have not been extended to EOUs/SEZ units.

I am taking up this issue with the Cabinet Committee on Economic Affairs, as I firmly believe that relief needs to be provided to all exporters, irrespective of the scheme, under which they are operating, he said.

The minister said SEZ units and developers were facing certain problems in the context of service tax, benefit of DEPB/duty drawback on supplies to SEZ developers and interpretation of Section 10AA of the Income Tax Act. We are working on these issues and hopefully will be able to resolve these suitably, he said.

Certain issues related to state governments like implementation of single window mechanism and exemption from stamp duty will be looked at in a meeting which the commerce secretary has been asked to hold with various state governments this month, he said.