Seminar organized on the future of Special Economic Zones (SEZ) at ASF Insignia, Vatsal Valley

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October 10, 2019, Gurugram: A daylong conference was organized to discuss and deliberate on Special Economic Zones (SEZs) and the outlook of the scheme post March 31, 2020. This event was organized by Gurugram based ASF Group at their flagship project campus ASF Insignia (A SEZ) at Vatsal Valley (Formerly known as Gwal Pahari). The conference was inaugurated by Chief Guest Dr. L.B Singhal, Development Commissioner, NOIDA SEZ in the presence of Guest of Honor Shri. Bhuvnesh Seth, Vice Chairman, EPCES and Shri. Anil Saraf, CMD, ASF Group.

 Delivering the welcome address, Shri Anil Saraf, CMD, ASF Group, said, “I happy that with this event happening, it will help in clearing a lot of doubts specially about the Sunset clause which is supposed to set in 2020. SEZ is not only about the benefits that you get particularly the direct tax benefits. Today the difference between the applicable effective rate of MAT with surcharge and effective rate of income tax, if you were to pay in entirety, is not more than 6.5-7 %. SO the benefit is actually illusionary. We are more on what are the other benefits that are a SEZ holds out. There is a completely separate GST exemptions, there is a completely separate indirect tax exemptions be it customs and excise so on and so forth. There is single window clearance mechanism, the infrastructure the SEZ is superlative in nature, is quite affordable because developers have often availed lot of benefits creating these infrastructure which effectively is cheaper by 15 odd percent then what otherwise it would cost to build a similar infrastructure because of the infrastructure. with all these advantages I think the need now is to expand the reach of SEZs rather than only focusing on direct tax benefits. The set of compliances which a unit currently  present in a SEZ has to follow through could be simplified and in case a unit gives up the direct tax benefit,  there are certain other flexibilities which can be availed. Those flexibilities should be universally be made applicable and available to all. So, I think that is where it should head. SEZ will need to reinvent themselves and can help to fuel the economy and explore the economy potential of the country. There is a need to clarify what all SEZ regulatory regime in current context means. What are the polices that are available to the enterprises, exporters in particular as far as the benefits of SEZ is concerned. The need of the hour is to take a step back and think what is available and think about how best we can utilize of what is available.”

In his introductory speech, Dr. L.B Singhal, Development Commissioner, NOIDA SEZ said, “ SEZ scheme was made operational in 2006, and in the beginning income tax benefits were provided for the SEZs. But subsequently in 2011, MAT has been imposed, and then it was made clear, that income tax benefit will be done away with, from March 2020. The unit which starts operations in March 2020, they will continue to get income tax benefit, as is provided in the SEZ Act, that is for the purpose of for the time period of 15 years. For the developer, income tax exemption has already been discontinued since 2017, but there is a misconception that if the income tax benefit goes away, it may not remain a lucrative scheme. I would like to state very categorically, SEZ scheme will definitely continue and what is being done away with it is only the income tax exemptions. Rest of all the benefits i.e exemption from IGST exemption from all other taxes, that continues to be there, and the benefit which SEZ is not merely the direct tax exemption, it is indirect tax exemption, exemption from state taxes together with the productive environment, the entire ecosystem is supported with robust infrastructure. The customs officials are present at the doorstep of the SEZ campus. All that will continue to be there, so SEZ scheme will continue, and the exact scheme has been doing very well, and I am sure it will do continue to do very well. As of today, SEZ is proving employment to about 20 lakh people and that will continue to be adding up in the future. Last year have we crossed 100 billion dollars of which 53% experts are from the IT sector. SEZ schemes will continue to flourish.