NEW DELHI: Export promotion body for special economic zones has asked the finance minister to roll back the minimum alternate tax (MAT) on SEZs saying that the move will boost overseas shipments as well as domestic manufacturing.

In its pre-Budget consultations with finance minister Arun Jaitley, the Export Promotion Council for EOUs & SEZs (EPCES) said, “MAT on SEZs should be exempted. If not feasible at least reduce it to 7.5%… exemption may be provided from Dividend Distribution Tax to SEZ developers.”
MAT and the dividend distribution tax on SEZs have dented the investor friendly image of these special zones. In 2011, government had imposed 18.5% MAT on the book profits of special economic zone developers and units.

Although government last year announced an incentive package to revive these zones, several developers are surrendering their projects due to the imposition of taxes. “To offer stable economic policy, to attract investment, SEZ Act & Rules should not be altered by any other Act or Rule,” EPCES said in a statement on Monday.