Tuesday, January 23, 2007

Land resale barred for SEZ units


NEW DELHI, JAN 21 : The government has decided to amend the Special
Economic Zones Rules to ensure that developers replace units in SEZs
that do not start operations within a year of getting permission.
Further, these units will be barred from selling land in SEZs.
According to commerce ministry officials, this will partly address the
growing concern among political parties that SEZs are turning into real
estate business. "There are units which wait for a year or so for land
prices within an SEZ to appreciate and then sell it off to make a fast
buck. We will ensure that this does not happen," an official told FE.

The proposed amendments, expected to be notified in a month, will ensure
developers failing to get their zones notified within six months of
receiving a formal approval not just lose clearance for their projects,
but also cough up stamp duty to respective states for the land acquired.

The commerce ministry has asked states to ensure that developers—which
have obtained clearance in principle from the Board of Approval—are
exempt from stamp duty not only for initial land acquisition but for all
subsequent activities.

• Units failing to operationalise
in a year will lose clearance
• Builders to pay stamp duty if they fail to get SEZ notified in 6 months
• No tax sop for rehabilitation work outside SEZs
• Developers to declare that their land is litigation-free

Besides, the ministry now plans to include a provision, restricting tax
exemption on relief and rehabilitation undertaken by developers only to
such activities within the SEZ. “R&R work undertaken outside SEZs—like
buildings and schools—will not be eligible for tax exemption,” the
official said.

The ministry has decided to ask developers to not only get a
non-encumbrance certificate for land acquired but also file a specific
affidavit, stating it is litigation-free. "The amendments will specify
that units will not be allowed to sell their waste in the domestic
tariff area.



Post a Comment

<< Home