MAT on SEZ under DTC – Request to reduce the rate

The Commerce department is in talk with Ministry of Finance to push for lowring the minimum alternative tax (MAT), proposed in Direct Tax Code (DTC) Bill, on units in Special Economic Zone (SEZ). The department is set to raise this issue before the parliamentry committee on DTC, that 20% MAT on units is too high and does not make any commercial sense.
Further, the Chairman of Export Promotion Council for SEZ, Mr.R.K. Sonthalia expressed his views that DTC should not alter the objective and sprits of SEZ Act, 2005 after four and half years of its implemantation as it was aimed to acheive and provide long term stability.
Moreover, if this (rate of 20%) remains same, investing into SEZ would not be an attractive option. The Investor may open their units in Domestic Tarrif Area (DTA), where they could get benefits form incentive schemes such as Focus Market and/ or Foucs Products Shcemes under Foreign Trade Policy 2009-2014. It is of worth noting that these schemes are not available to units in SEZ.

Curtsy: Gaurav Garg (Company Secretary)