SEZs to have duty-free shops
SPECIAL economic zones (SEZs) are getting another cap on their feather: Duty - free shopping. The government has agreed to allow duty-free outlets in SEZs and a dozen applications filed by Fiemin-go Duty free Shop Ltd which runs duty-free outlets across the country’s major international airports are under consideration now.
Since SEZs are still going through teething troubles, setting up duty-free outlets in these zones was a grey area till now and there was no clarity on allowing foreign investment in such out-lets. Therefore, the issue was discussed by the Foreign Investment Promotion Board (FIPB) recently and it has been decided that such outlets can be allowed with prior permission from the department of commerce.
It is understood that rules will be framed for such outlets by the department in consultation with revenue officials. To avoid confusion, the government would specify the categories of people who would be eligible for purchase from these outlets and the value ceiling on such transactions. SEZ units and SEZ developers are entitled to duty-free inputs but not all purchase of consumer goods might be covered by this concession.
Apart from SEZs, Flemingo had sought permission for opening duty-free outlets at Wagah border with Pakistan and the Paradeep port. The foreign investor had also suggested that an ‘omnibus’ clearance should be given instead of approving new outlets one by one.
After discussing the ‘omnibus’ clearance suggested by the foreign investor, FIPB decided that permission should be granted only with the approval of the nodal authorities — commerce & industry ministry in the case of SEZs, the civil aviation ministry in the case of airports and the ministry of shipping in the case of ports.
ABB mulls entry into ports, SEZs
RIDING on the growth of its core business and with order backlog of Rs 3137.5crore as of June, ABB India is now looking at increasing its market penetration by adding new revenue streams and more channel partners. The power and automation technology major is also planning to increase its total headcount, which currently stands at around 5,000.
Speaking to ET ABB India vice chairman & MD Ravi Uppal said: “We are planning to hire close to 800 people within this year against 600 last year.” He adds: “There are plans to increase the number of scientists, engineers and domain experts from 356 to 5oo at the R & D centre in Bangalore.” The company also intends to increase the number of engineers at the recently established global operations-cum-engineering centre at Peenyain Bangalore, which is fully functional with around 250 engineers.
As a long-term strategy to strengthen its marketing base and improve the reach of its products in the Tier n cities ABB India is planning to hire around 300 channel partners or distributors in the near future. Currently, the company has a network of 650 channel partners. These channel partners are mainly responsible for the sale of standard products like low voltage switchgears, drives and motors.
ABB India is also looking at the prospect of adding new business streams like developing automation system for ports and process automation and electrification of upcoming SEZs across India. “With metals leading the charge, ABB India is aggressively targeting sectors like pulp & paper, cement, construction and pharm,” says Uppal.
Source : ET
SEZ Sops now in Rajya Sabha
The SEZ sops controversy has now reached the Rajya Sabha at last. The commerce minister Kamal Nath has said that the projected revenue loss from the incentives was only imaginary and these SEZ will be one of the major income to the Government and will definitely act as a booster to the Economy of the Country. He clarified that “According to a study by National Institute of Public Finance and Policy the loss of tax revenue on account of SEZs on the indirect tax front would be Rs 90,000 crore and direct taxes Rs 70,000 crore”.
He also discussed that there are around 28 operational SEZ’s across the country which have accounted for exports worth Rs 22,000 crore last year besides creating direct employment for over one lakh people and the SEZs operational at present had 927 manufacturing units and an investment of Rs 2000 crore had flowed into them in last two months. Nath, however, said, “Taxes cannot be exported to remain competitive. The government offers tax concessions to exporters otherwise also. The incentives for units in SEZs cannot be less than what is being offered outside.”
SEZ Policy changes may hurt developers
So, the tussle between the Ministry of commerce and Finance is getting to the throat of the SEZ developers. The Finance ministry has challenged the criterion for the selection of the developers of the Special Economic Zones (SEZ’s). The government would have to rewrite the SEZ policy and all approvals would need a fresh look, if the finance ministry’s latest proposal is accepted. The finance ministry has also said that a policy framework would be desirable in order to counter charges of discrimination, even for the current lot.
Our Review : In case the proposal of the Finance Ministry is accepted, there will be a definite downfall in the real estate market and specially the developers who have already purchased the Real Estate in their concerned states will have to face a huge loss. What we personally feel that the problem with the finance ministry is that, they will not get anything out of these special processing zones. Most of the incentives that are given in the SEZ are against the Finance ministry. But the point is that, these SEZ, whenever operational will give a great push to the economy of the country and especially where the overseas multination companies will seek permission to set up there units here in India, will give the country a good amount of foreign exchange. Many industrial sectors, like textiles, which are facing problem with the Chinese goods into the market will defiantly have a chance to rise in the overseas market.
