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Procedural delays bog down SEZs

Procedural delays bog down SEZs

Procedural delays and lack of clarity over Direct Taxes Code are forcing many developers to seek extension in the timeframe for the development of special economic zones.

Procedural delays and lack of clarity on the tax breaks in the new Direct Taxes Code (DTC) are forcing many developers to seek extension in the timeframe for the development of special economic zones ( SEZs).

More than a dozen developers have recently applied for the extension of timeline for the SEZs due to procedural delays. "Yes, we have received many requests for the extension of timeline for various SEZ projects. The ministry is already considering the request and it will take a call before January 15," a senior official at the commerce ministry told Mail Today. "There are also few requests for withdrawing from the SEZ project," the official said. However, he did not specify any name or number of requests for extension or withdrawal. The official accepted that even post-revival there has been a decline in the number of fresh proposals for SEZs.

On the other hand, developers and investors cite long procedural delays in getting various approvals, especially from the state governments that force them to seek extension. Navin Raheja, chairman and managing director ( CMD), Raheja Developers, added, " We are considering applying extension of timeframe for developing SEZs."

According to Raheja, the approval for his SEZ is valid for three years from the date of notification but for the development process to start, many other approvals are required, such as environmental clearance, master plan approval from state level and the central government level. All these approvals and activities take substantial time. Practically, it is not possible to complete the development work within such a short period.

Apart from the delay in getting clearances, developers feel that the lack of clarity from the centre regarding tax breaks are also responsible for the poor response from investors and developers.

Courtesy: Mail Today 



Published on: Jan 05, 2011, 11:03 AM IST
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