Commerce minister expresses concern over MAT for SEZs

Expressing 'serious concerns' over the imposition of Minimum Alternate Tax (MAT) on Special Economic Zone (SEZ) developers and units from April 2012, commerce and industry minister Anand Sharma has taken up the matter with Pranab Mukherjee, his finance counterpart.

''I have written to the finance minister,'' said Sharma. ''It was a surprise and surely a matter of concern.''

Mukherjee, in his budget proposals presented to Parliament on February 28, announced that the government would impose MAT of 18.5 per cent on the book profits of both SEZ developers and companies located within the zones. The changes are to be effective from April 2012.

The finance minister also proposed to do away with exemption from Dividend Distribution Tax for SEZ developers from June.

The government had earlier decided to impose MAT on SEZs only after the introduction of the Direct Tax Code (DTC) from next year.

Exports from SEZs have shot up dramatically this fiscal, expanding by 47 per cent to Rs.2,23,132 crore during the April-December period, as compared to the first half of the previous fiscal. About 130 SEZs are in operation in India, while the government has given approval for 582 such zones.