Hyderabad, Nov 25: Dr Reddy's Laboratories has said the Centre's decision to introduce sunset clause for Special Economic Zones (SEZs) from March 2017 is "at odds" with the Make in India objective and should be deferred.
Welcoming the government's initiative to simplify taxation laws, Dr Reddy's President and CFO Saumen Chakraborty said, "The introduction of a sunset clause for SEZs from March 31, 2017, seems to be at odds with Make in India objective.
This could be deferred by a few more years, considering the significant investments by the companies, as also the impact SEZs encountered due to the MAT (minimum alternate tax) levy."
"The press release by the CBDT relating to tax reduction from 30 per cent to 25 per cent over next four years, coupled with phasing out the investment-linked and profit-linked deductions, is a step in right direction. At the same time, the government should also consider a reduction of MAT in a phased manner as well," Chakraborty said.
Furthermore, the withdrawal of R&D weighted deduction is potentially counter-productive and likely to negatively impact India's innovation efforts, he opined. Countries across the world have been introducing various measures for promoting R&D initiatives in the form of credit, weighted deduction and patent box.
"The R&D weighted deduction must continue, to provide India a level-playing field in an increasingly competitive global innovation environment," he said.