AMID SLUMP, IT COS ASK FOR AMENITIES FEE WAIVER

T K Rohit, Chennai, October 20, 2008
The Times of India

Amidst the economic slowdown, the infotech industry has requested the Tamil Nadu government to exempt the IT Special Economic Zones from paying the infrastructure development and amenities fees levied on SEZs with more than one million sq ft of built-up area.

The state government had decided in 2007 that all multi-storeyed buildings in SEZ will have to pay an impact fee of Rs 100 per sq ft of built-up area.

Sources told TOI that officials of NASSCOM, Export Promotion Council and eight IT companies in the state met the chief secretary A K Sripathy on Friday and requested him to look into the matter.

" SEZ rules say at least one million sq ft be built in an IT Special Economic Zone. These zones are a duty- free enclave, and both the state and the Centre grant IT companies exemption on tax and other levies. So, this fee, which works out to a minimum of Rs 10 crore, has to be paid to the state. Hence they requested the government to exempt this fee for IT SEZ," a source said.

An IT company official, when contacted by TOI, said IT companies could be spending nearly Rs 400 crore for constructing buildings inside the SEZs. "On top of that, we have to pay an additional Rs 10 crore to the government because of this fee. This is more than the cost of the land," he said. According to him, if the companies built more than one million sq ft, they will have to shell out more.

TOI has learnt that the officials also asked the government to provide some clarity on Open Space Reservations (OSR) rules for SEZ's in the state. They brought to the notice of the government that as per the CMDA and DTCP rules, 10 per cent of the land has to be given to the local authority as gift deed.

"The requirement for beginning an IT SEZ is 25 acres. If 10 per cent of the land has to be given to the local authority, it will fall below the necessary requirement as per the SEZ Act and it will cease to be a SEZ. If a company has 50 acres of land, there will be no problem in surrendering five acres. But for a company that has allotted exactly 25 acres, it will lose the SEZ status itself," the officials reportedly told the chief secretary.