Business Daily from THE HINDU group of publications
Monday, May 04, 2009
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Business Daily from THE HINDU group of publications Monday, May 04, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Mentor
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Taxation Industry & Economy - Infrastructure Columns - For the Asking Economic islands
Why are special economic zones (SEZs) described as countries within a country? Sujatha Kakodkar, Sholapur
Because an SEZ is insulated from the mainland economy, as it were. That is why an SEZ is also known as an economic island. Foreign exchange controls are suspended in these areas. Sales to units in these areas are deemed to be exports, begetting all the export benefits for the one in the domestic tariff area (DTA). Excise duty is not payable on goods produced in SEZs. Nor are the inputs and capital goods imported by the units located therein liable to customs duty. No export duty, if any, is payable on goods exported from these units. While all these sops under the indirect tax laws are permanent and forever, the income-tax holiday is on only for the initial 15 years. China built its export surplus largely on the back of the SEZ model.
S. MURLIDHARAN More Stories on : Taxation | Infrastructure | For the Asking
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