The upcoming Budget is likely to revamp the Special Economic Zones Act, 2005, in a major push to boost the sector. Sources told Business Today TV that the government is likely to give infrastructure status to Special Economic Zones which will enable these projects to avail benefits like lower borrowing rates, tax concessions, and increased flow of foreign and private capital.
Moreover, Special Economic Zones (SEZ) would be in a position to accept payment in rupee.
The Budget could focus on attracting international investors to Special Economic Zones. This move would encourage and promote investment of single, multi-partner and international companies in SEZ.
SEZ exports fell to $102.3 billion in the financial year 2020-21 from $112.3 billion in the previous financial year. In the upcoming Budget, amendments could be made to the sunset clause. According to the sunset clause, only those units that started production on or before June 30, 2020, would be granted a phased income tax holiday for 15 years.
Major changes in SEZ legislation will be based on the expert committee headed by Bharat Forge Chairman, Baba Kalyani who submitted its report in November 2018 to revitalise these zones and help realise India’s merchandise-export target of $1 trillion by 2027-28.
The SEZ Act was passed in Parliament in 2005, followed by the rules being promulgated in February 2006 with the objective to attract foreign direct investment, develop world-class infrastructure, and create a globally-competitive and hassle-free environment for companies engaged in exports of goods and services.
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