Friday, would take up the issue of totally exempting the export profits of SEZ units from income
tax for a tax holiday period of five years.
Among other controversial matters that are on the agenda is the definition of what constitutes a
‘vacant’ land and in this context whether it should withdraw the approval given to Adani
Group’s multi-product SEZ at Mundra in Gujarat and Essar’s steel SEZ for alleged violation of
the rules regarding vacancy of land. Also on the table are categorizing SEZs as core sector
projects, exempting SEZ units from Minimum Alternate Tax (MAT), doing away with export
duty on supply of steel to SEZs, as well as extending Cenvat credit facility to SEZ developers,
sources said.
At present, the particular provision that deals with this issue of tax on export profits of SEZ units
is Section 10AA of the Income Tax Act. This Section accords income tax exemption to the SEZ
Units on the export income. But, as per the Section, export turnover of the unit is divided by the
total turnover of the assessee while calculation of exemption from export profit.