SEZ stamp duty waiver under scanner

September 18, 2008	(Be the first to rate this story!)  Loading ...
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The finance ministry has sent sought clarification on the stamp duty exemption given to special economic zone developers and SEZ units. The finance ministry took the step when objections were raised by certain states on the exemption given by the Centre to SEZs. States claimed that the Centre did not have the power to provide such exemption and it had encroached upon the states’ powers, causing revenue loss to them. Detailed views of the law ministry have been sought on the amendment to the Indian Stamp Act as a consequence of the Special Economic Zone Act, 2005.

North Block has also asked the commerce ministry for certain clarifications on the new provision itself, ministry sources said. As per the provision, both the developer and the unit are exempted from payment of stamp duty. According to the commerce department, the legal aspect of giving stamp duty exemption to SEZs was examined at the time of drafting the SEZ Act. “We believe that the Centre is within its rights to give a stamp duty exemption to SEZ developers,” an official said. However, the official added the commerce department would consider what the law ministry had to say on the issue. The objection has been raised by states including Orissa, Madhya Pradesh and Andhra Pradesh. In fact, some other states wanted to restrict the tax benefit to processing area in the SEZs where the core manufacturing activity takes place. The issue would be discussed in detail with the states after the law ministry gives its opinion on the matter.

News Published Under:   Special Economic Zones |

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