No matter the government's delay in notifying the approved special economic zones, a clutch of SEZ developers have begun construction of related infrastructure aiming to meet deadlines they have promised their clients.
Though there is nothing illegal about it, the developers cannot avail of tax exemptions on the money they spend on any construction before notification of SEZs.
Official sources told that among developers who had begun construction of infrastructure without waiting for the notification were DLF, the K Raheja group, Suzlon and Brandix.Though there is nothing illegal about it, the developers cannot avail of tax exemptions on the money they spend on any construction before notification of SEZs.
DLF has to set up IT/ITES SEZs one each in Hyderabad, Chennai and Kolkata, and two in Gurgaon. The RK Raheja group has to set up two IT/ITES parks, one each in Andhra Pradesh and Navi Mumbai, besides a 107-hectare services SEZ in Goa. Suzlon's 107-hectare high-tech engineering SEZ is coming up in Coimbatore, while Brandix has a 404-hectare textile SEZ in Visakhapatnam.
Under deadline pressure, some other developers, too, have chosen to keep the question of tax sops at the back of the screen for the time being. Developers that have obtained the BoA's formal nod after getting the required land free of legal hassles would have to get clearances from state governments and then the Centre's notification.
To date, 63 SEZs have been notified and another 50 are waiting to be notified. Another 121 have got the formal approval and the required land, but are yet to get state-level clearance.
The Centre has put on hold fresh approvals and notifications until an empowered group of ministers takes a decision on rehabilitation issues and compensation package for people who are displaced because of SEZs.
When contacted, a DLF executive, who did not want to be named, said, "For us, if we lose a customer, we will lose much more money and goodwill than the amount we forgo as tax. So we have started construction before the notification. Of course, we are disappointed about the delay from the government's side in notifying our SEZ. But we are committed to our clients and will keep our promise regarding the deadline on the handover date." Source: Financial Express
