In a written communication addressed to the commerce and industry minister Anand Sharma, the apex industry body said, “Considering that till date, only 44 per cent of notified SEZs have reached operational stage and number of new proposals fell drastically together with demand by developers, a serious government effort is required to keep SEZs attractive.”
To streamline the procedures associated with service tax, ASSOCHAM has suggested to put an end to Form A-2 and allow exemption for specified services used in authorized operations of SEZs based on Form A-1 issued by the SEZ specified officer.
The ASSOCHAM letter also pointed out that, the Maharashtra SEZ developers and units need to pay value added tax (VAT) on both indigenous procurement and domestic tariff area (DTA) sales, which is exempted in many other States. Therefore, the letter urged the commerce Minister to address this issue at the State Government level and grant an exemption for the same, both for authorized operations in processing as well as non-processing areas.
ASSOCHAM has also urged for customs duty exemption for operation and maintenance vis-à-vis authorized operations in non-processing areas. “It may be noted that social and commercial infrastructure together with recreational facilities in non-processing area is of utmost significance to provide support to processing area activities and employees, while currently exemption from taxes and duties is only for initial establishment of these infrastructure facilities.”
The other suggestions made by ASSOCHAM are:
· The minimum built up processing area condition of five hectares (Ha) and 10 Ha SEZ should be waived or modified suitably for information technology (IT) and information technology enabled services (ITES) sector.
· The cost recovery charges on bills raised by local Development Commissioner’s office that are borne by the developer should be restricted only to salary component drawn by officer in his or her parent department.