Expressing serious concerns over the DTC Bill, SEZ entrepreneurs on Tuesday said the proposed tax provisions would hit employment and drive away investors from the special economic zones.
Export Promotion Council for EoUs and SEZs (EPCES) said that by altering the SEZ Act through the DTC Bill, the government is sending a wrong message to investors.
"These provisions do not meet the requirement of the SEZ scheme fully and would very seriously affect employment, exports and investment in the SEZs," EPCES Chairman R K Sonthalia said here in a statement.
The bill, which was tabled in Parliament yesterday, proposed that the Special Economic Zones notified on or before March 31, 2012, will get income tax benefits.
And units in SEZs that commence commercial operations by March 2014 shall be allowed profit-linked deductions permitted under the Income Tax Act 1961.
"Time period provided for the new unit is insufficient. Hence this time period needs to be extended further," he said.
Sonthalia said that as the SEZ Act was just implemented four years back, it should not have been altered.
"By altering the SEZ Act through the DTC Bill, we are sending a very wrong message to investors," he added.
Exports from SEZs have gone up from Rs 22,000 crore (Rs 220 billion) in 2005-06 to Rs 2,20,000 crore (Rs 2200 billion) in 2009-10.
Direct employment in SEZs have gone beyond 5,50,000 people and investment in the SEZs gone up to more than Rs 1,66,000 crore (Rs 1660 billion).
"This shows the tremendous progress and this process needs to be accelerated further," EPCES Director General LB Singhal said.
