No I-T exemption for old SEZ units

Government feels SEZs are not meant for facilitating migration of
existing industries to avail tax sops

SURABHI
Posted online: Friday, March 02, 2007 at 0000 hours IST

NEW DELHI, MAR 1: The finance ministry has decided not to give any
income tax exemptions to existing units that shift into new special
economic zones (SEZs).
The provision is a part of the Financial Bill, 2007 presented by finance
minister P Chidambaram in Parliament on Wednesday. Outlining the reasons
for the provision, it said, “SEZs are intended to promote new industry
and new investment and not to facilitate migration of existing
industries to avail tax concessions.”

The units that would not be eligible for tax exemption would include
those formed by splitting up or the reconstruction of business already
in existence or not formed by the transfer of new machinery or plant
previously used for any purpose, the Bill says.

However, 100% relief from payment of income tax would continue to be
given to those new units in SEZs, which begin production after April 1,
2006. The finance ministry hopes that the move would help plug revenue
losses. It has estimated that tax sops to SEZs would result in loss of
revenue of over Rs 1 lakh crore in a four-year period.
http://www.financialexpress.com/fe_full_story.php?content_id=156481