Cabinet nod for legislation on SEZs
New Delhi: The Indian Cabinet has approved a proposal for enactment of a central legislation on special economic zones (SEZs) which is expected to encourage private sector to commit funds in development of infrastructure in SEZs and set up units there. Addressing a press conference, Commerce and Industry Minister Arun Jaitley said the objective behind the legislation was to provide investors with a stable policy regime which would not change from year to year. "We want to signal to investors that we have a long-term legal and fiscal regime in place. Investor confidence would increase several-fold
because of it. "

For SEZ units, the legislation proposes 100 per cent income tax exemption for five years and 50 per cent tax exemption on reinvestment of profits for 10 years. For off-shore banking units and units in international financial service centre, the legislation proposes 100 per cent tax exemption for 5 years and 80 per cent tax exemption thereafter. Funds would be available at international rates to SEZs and domestic industries. It has also been proposed that no tax on distributed profits would be chargeable in respect of companies engaged in development, operation and maintenance of SEZs.
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