SEZ to contribute Rs 44,000 to exchequer: Com Min vs. Loss of 90000 cr per Finance min- Finance-Economy-News-The Economic Times
SEZ to contribute Rs 44,000 to exchequer: Com Min- Finance-Economy-News-The Economic Times
NEW DELHI: The Finance Ministry's claim that SEZs would lead to a revenue loss of Rs 92,000 crore has been strongly contested by the Commerce Ministry, which has said that in fact the Government stands to gain Rs 44,000 crore from them.
"The economic activity generated by the SEZs will be incremental. Government never had this revenue. However, the new economic activity would result in the income of Rs 44,000 crore in ten years for the government," official sources said.
According to a study by the National Institute of Public Finance and Policy, the loss of tax revenue on account of SEZs on the indirect tax front would be around Rs 90,000 crore and on direct tax front the loss would be Rs 28,000 crore.
According to Commerce Ministry estimates, if the loss to the exchequer is Rs 90,000 crore than the export profit of units in the 150 SEZs that have already been cleared should be around Rs 4 lakh crore.
Assuming that the units have 20 per cent profits then their combined economic activity would be close to Rs 20 lakh crore.
This economic activity would create individual incomes that would not be exempt from tax, sources said.
The Commerce Ministry said the government would also gain from sale of goods from SEZs to domestic tariff area as import duties would have to paid. These import duties would be higher as they would be on finished products and not on raw material that the units will import duty-free.
It defended tax concessions to exports by units in SEZs saying that the units in domestic tariff area were already getting such concessions. On incentives for developers of SEZ, the officials said that developers of infrastructure were already getting tax concessions.
NEW DELHI: The Finance Ministry's claim that SEZs would lead to a revenue loss of Rs 92,000 crore has been strongly contested by the Commerce Ministry, which has said that in fact the Government stands to gain Rs 44,000 crore from them.
"The economic activity generated by the SEZs will be incremental. Government never had this revenue. However, the new economic activity would result in the income of Rs 44,000 crore in ten years for the government," official sources said.
According to a study by the National Institute of Public Finance and Policy, the loss of tax revenue on account of SEZs on the indirect tax front would be around Rs 90,000 crore and on direct tax front the loss would be Rs 28,000 crore.
According to Commerce Ministry estimates, if the loss to the exchequer is Rs 90,000 crore than the export profit of units in the 150 SEZs that have already been cleared should be around Rs 4 lakh crore.
Assuming that the units have 20 per cent profits then their combined economic activity would be close to Rs 20 lakh crore.
This economic activity would create individual incomes that would not be exempt from tax, sources said.
The Commerce Ministry said the government would also gain from sale of goods from SEZs to domestic tariff area as import duties would have to paid. These import duties would be higher as they would be on finished products and not on raw material that the units will import duty-free.
It defended tax concessions to exports by units in SEZs saying that the units in domestic tariff area were already getting such concessions. On incentives for developers of SEZ, the officials said that developers of infrastructure were already getting tax concessions.
posted by Sandip K. Dasverma at
12:04 PM
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