No sops for non-processing activities serving consumers outside SEZ

New Delhi, Nov 17 (UNI) No question of tax sops to non-processing activities, providing services to consumers outside the SEZ, arises as developers have not asked for such benefits, Commerce Secretary Gopal K Pillai told UNI today.

The remarks were in answer to a question on Finance Ministry having talks with the Commerce Ministry to frame a new set of norms, prescribing only those non-processing activities which are based on the needs of the SEZ unit, will qualify for tax sops.

''We have not received any such communication,'' he said adding ''why would we give tax sops to them (non-processing activities serving outside consumers) when they have not asked for it?'' According to the government notification, non-processing activities can be spread over not more than 65 per cent of the total area of the multi-product SEZ while in product-sepcific zones, the limit is set at 50 per cent.

At a round table on ''New SEZ Policy: Boon or Bane for the Economy'' organised by PHDCCI here, Mr Pillai toned down the controversy regarding agricultural land acquisition for SEZ by saying that it was ''a result of misinformation.'' Giving the example of West Bengal, the commerce secretary said, the state governments, after acquiring agricultural land, notified it to the Board of Approval as an industrial land.

''And the acquisition of industrial land for the puropose of setting up SEZ is permissible as per the SEZ Act and Rules,'' he added.

Ninety per cent of the land acquisition by state governments is for roads, highways, power and other infrastructure projects, Mr Pillai pointed out adding that ''when no objection is raised to such acquisitions, why so much controversy has aroused on SEZ projects, which accounts for a mere two to 10 per cent of land.'' In answer to questions raised in some quarters about the size of SEZ projects, he said, ''Bio-pharma, IT, Auto etc do not need big area to develop an economic zones.'' China, where the largest SEZ is spread over 49,300 hectares, can have big zones as the land is owned by the government and can be acquired with ease, he said.

China offers two-year tax exemption to SEZ units while India provides tax holiday of 10-year. ''This is to attract more foreign firms to set up their units here,'' the secretary said.

UNI PKS CS DS1543