The Economic Times
Real estate developer DLF will not be allowed to get its four special economic zones (SEZs) denotified or cancelled till the government carries out inspection of the zones to ensure that all duty exemptions enjoyed by the developer during implementation of the project are refunded. It must also be ensured that there are no units in these zones which could get affected by the denotification, a government official said.
“We have already asked our field organisations to start the inspection process. The Customs department will also carry out its own investigations,” a commerce department official said.
DLF recently asked the commerce department to denotify four of its IT/ITES SEZs in Bhubaneswar, Gandhinagar, Kolkata and Sonepat. The company, in an official statement, said the decision to get the zones denotified was due to a slowdown in demand for office space and an overall slump in the IT sector.
According to the commerce department, a developer can get a SEZ denotified as long as it is not operational and there are no units there, provided he refunds all the duty exemptions enjoyed because of the SEZ status.
A SEZ developer is exempted from paying local duties like excise and sales tax on materials purchased from the domestic tariff area (area outside the zones) for building and other activities within the zone, besides state government levies such as stamp duty and value-added tax. The developer is also exempted from paying Customs duty in case he imports inputs. “All these exempted duties have to be refunded to the government in case a SEZ is denotified,” the official said. Once the government officials deputed for the task certify that there are no units in the zones and calculate the duties to be refunded, the denotification can take place.
Interestingly, while the commerce department is of the view that there won’t be a problem in getting the DLF SEZs denotified, the same is not true for the three notified SEZs in Goa which the state government wants to be denotified. The denotification of SEZs has not happened yet as the developers are not in favour of the move and there are several units which have set up operations in these zones.
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