Special economic zones (SEZs) in the country have attracted investments totalling Rs1,28,390.44 crore as of 31 December 2009. A total of 105 SEZs are already exporting, while 348 out of the 575 proposals, for which the government has accorded formal approval, has been notified.
This is in addition to the seven central government SEZs and 12 state/private sector SEZs set up prior to the enactment of SEZ Act, 2005, Jyotiraditya M Scindia, minister of state for commerce and industry, informed the Rajya Sabha in a written reply today.
The SEZs have recorded a 127 per cent year-on-year rise in exports at around Rs1,52,092.68 crore till December 2009 and generated direct employment for 4,89,831 persons, the release noted.
The fiscal concessions are in built into the SEZ Act, 2005. Units in the SEZs are allowed duty-free goods for setting up units. They are also exempted from service tax, minimum alternate tax (MAT), central sales tax etc.
SEZ Units are allowed 100 per cent income tax exemption on export income under section 10AA of the Income Tax Act for the first five years, 50 per cent for the next five years thereafter and 50 per cent of the ploughed back export profit for the next five years.
Sales into domestic tariff area by SEZ units, on the other hand, attract all duties, including countervailing duties.