labels: industry - general, economy - general
Government to allow use of old machinery in SEZsnews
25 July 2007

Mumbai: The government will soon amend rules to allow units in special economic zones to use old machinery and still qualify for tax concessions.

The government had earlier prohibited use of second hand machinery in SEZs to prevent migration of units from domestic tariff area to the tax-free zones.

Reports quoting senior commerce ministry officials said amendments have been made in the Income Tax Act and now units will be allowed to use old machinery up to 20 per cent of their capital goods requirement.

The changes in the Act will be notified in the next 3-4 weeks after the revenue department fine-tunes the guidelines for transfer of old machinery to SEZs.

The rules have been amended on request mainly from technology companies who wanted to shift some used machinery from their operations outside India.

The companies include Cisco and Honeywell, and the old machinery that they want to bring in constitutes a small percentage of their overall investments in the SEZs, the official said.

The government expects SEZs to generate investments in excess of Rs2,59,000 crore by 2009 and create 1.7 million additional jobs, additional secretary in the department of commerce R Gopalan said.

Employment of foreign nationals in SEZs would also be subject to Indian laws, Gopalan said.


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Government to allow use of old machinery in SEZs