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EPCES , MNRE HOLD SEMINAR ON ENCOURAGING USE OF RENEWABLE ENERGY IN SEZs Thesynergyonline Economic Bureau NEW
DELHI, JUNE 15 : The
seminar was chaired by Mr Deepak Gupta, Secretary, Ministry of New & Renewable
Energy and attended by Mr D.K. Mittal, While
inaugurating the Seminar, Mr Deepak Gupta, Secretary, Ministry of New & Renewable
Energy said that SEZs are going to have a number of buildings covering institutions,
housing complexes, industries, sports and hospital facilities etc., it needs to
be ensured that these buildings are constructed on green designs based on solar
passive architecture concepts and become model of energy efficiency. Ministry
of New and Renewable Energy and Ministry of Commerce & Industry are keen to
help SEZ Developers for providing facilities available for green building constructions.
Mr Deepak Gupta, Secretary, MNRE further informed that Mr D.K. Mittal, Additional Secretary, Ministry of Commerce & Industry complimented Ministry of New and Renewable Energy for the initiative taken. Mr Mittal stated that a regulation needs to be put in place making it mandatory for use of renewable energy in the SEZs, which would result in saving of energy. He said that every SEZ Developer should create a mechanism for producing 1KW of renewable energy for one hectare of development in the SEZ. Hence, if a SEZ Developer is developing a SEZ of size of 250 hectares he should be putting equipments in this SEZ for producing 250 KW of renewable energy. We should keep a target of producing 10,000 KW of renewable energy in SEZs. He further stated that every developer should appoint a nodal person in the SEZ, who would work for development of green SEZ. During the seminar, pesentations were also made by Mr Tanmaya Tathagat, Environment Design Solutions, Mr S. Raghupathy, Sr.Director & Head, CII-Sohrabji Godrej Green Business Centre, Hyderabad, Mr Sanjay Seth, Advisor, Bureau of Energy Efficiency, Mr Kamal Meattle, CEO, Paharpur Business Centre & Software Technology Incubator Park, New Delhi, Ms.Mili Majumdar, Director, The Energy & Resources Institute (National Rating System for Green Buildings (GRIHA), Dr.Ashvini Kumar, Scientist 'F', MNRE. Dr.L.B. Singhal, Director General, EPCES said that deliberations at the seminar would be very useful for SEZ Developers. He informed that exports from SEZs have risen from Rs.66,638 crore in 2007-08 to Rs.99,688 crore during 2008-09 representing a growth of over 50 per cent. Dr.Singhal, while concluding seminar and summing up deliberations pointed out following action points: 1.
MNRE will work out a capsule of information, which will incorporate basic information
relating to green concept, procedure for 2.
This information will be displayed on website www.sezindia.nic.in so that this
information is available to all SEZ 3. In the MNRE, a Single Window Mechanism should be put in place so that SEZ developers could approach MNRE at one place for getting the information, guidelines, certification and subsidies. 4. Under SEZ Rules, guidelines should be issued advising SEZ developers to develop green building as this will be extremely useful contribution of SEZs to the society and to the country and SEZs will become role model for development as buildings coming up in those areas. 5.
MNRE should examine the possibility of distributing subsidies for implementation
of green building concept, as administered by
At the meeting, it was informed that more than 20 SEZs are already coming up as green SEZs. (editor@thesynergyonline.com) EPCES SUBMITS SUGGESTIONS FOR UNION BUDGET 2009- 10 , FTP 2009-14 Thesynergyonline Economic Bureau NEW
DELHI , JUNE 05 : On behalf of the Council, Mr R.K. Sonthalia, Chairman, EPCES and Dr.L.B. Singhal, Director General, EPCES attended the meeting. Mr R.K. Sonthalia, Chairman, EPCES highlighted the issues of EOUs and SEZs. As regards EOUs extension of sunset clause under Section 10B of the IT Act, Mr Sonthalia said that at present income tax exemption is available to the EOUs upto March 31 ,2010. This may be extended for a further period of 5 years, keeping in mind the contribution made by the EOUs in manufacturing, employment and value addition and present difficult times. He said that EOUs have been subjected to MAT, by an amendment carried out by Finance Bill 2007. This amendment should be repealed. Regarding Extending benefits of Vishesh Krishi & Gram Upaj Yojana Scheme, Focus Market Scheme, Focus Product Scheme and Hi-tech Export Promotion Scheme to all EOUs, Shri Sonthalia said that at present benefits of these schemes are available to the EOUs only in case these EOUs do not avail direct tax exemption under Income Tax Act. It is requested that benefit of these Schemes should, be extended to all EOUs irrespective of whether they are availing exemption from income tax or not. For simplification under EOU Scheme, EPCES has urged that cost recovery charges may be done away with.The requirement of procurement certificate should be abolished. For sale of goods from EOU to DTA, Education Cess should be imposed once instead of 3 times. For sale of goods from EOU to DTA cenvat credit formula should be revised and cenvat credit should be given for all duties including Education Cess, Higher Education Cess, Additional customs duty etc. The benefit of Focus Market Scheme, Focus Product Scheme, VKGUY, Hi-tech Export Promotion Scheme, Served from India Scheme for export from SEZ should be extended to export from SEZ as well subject to the condition that they submit a declaration that for supply of goods from DTA to SEZ these benefits have not been claimed. ( editor@thesynergyonline.com) REALILSTIC EXPORTS PROCEEDS IN '09-10 LIKELY TO BE US$180 BILLION AGAINST TARGETED US$200 BILLION Thesynergyonline Economic Bureau NEW
DELHI, APRIL 28 : In its preliminary assessment on Export Targets Vs. Reality, the ASSOCHAM is of the view that in US alone, nearly 60% fall in export proceeds of India have been witnessed in 3rd and 4th quarter of fiscal 2008-09. US being the largest trade partner of India will continue to suffer slowdown in 2009-10, the reflection of which would naturally fall on India’s export to it. Likewise,
the scenario in EU and UK would remain so in the current fiscal and therefore
India needs to be realistic as far as its export targets are concerned. The Deptt.
of Commerce & Industry had set export targets of US$ 200 billion for current
fiscal. Against this, it is highly likely that the total export proceeds on realistic
basis would not be more than US$ 160 billion. It may be mentioned here that in
fiscal 2008-09, the export proceeds brought India revenues to an extent The assessment carried out under supervision of Mr. D S Rawat, ASSOCHAM Secretary General points out that the most prolific export earning sectors will remain under severe stress in 2009-10 because of their demand constrictions overseas and lack of incentivized policies on domestic front. These include sectors such as textiles, handicrafts, carpets, leather, gems & jewellery, marine products including spice exports. Textile sector which is a major revenue earning source will continue to face technological upgradation as sufficient funds are unlikely to be allocated for it. Job losses will continue to take place in the sector and it will face much more severe competition from neighbouring countries such as Pakistan, Sri Lanka etc. which will squeeze its competitive edge in economies of scale especially EU, US and ASEAN including Latin America, said Mr. Rawat. The
situation will be more or less same for other sectors already identified in the
assessment and due to this, India’s export According to ASSOCHAM, the corporate sector expects the period of downturn in the economy to go on until JANUARY 2010 and it is only after that the economy will start bouncing back and the fiscal packages announced by the government will start paying richer dividends to Indian Inc. The last quarter of the current fiscal will bring in maximum earnings to India through exports as by then, revival will have taken place in saturated market for creating demand for Indian products. The ASSOCHAM is also of the opinion that just as the government revised its export targets for fiscal 2008-09 by bringing it down to US$ 175 billion from earlier target of US$ 200 billion, in the later part of the current fiscal, the Ministry of Commerce & Industry might do the same as well in later part of current fiscal. In fiscal 2008-09, total export proceeds realised stood at less than US$ 170 billion, US$ 5 billion lesser than the revised targets. However, the ASSOCHAM also holds that input costs would further reduce because of stiffer competition and manufacturing will pick up especially capital goods industry registering a growth of nearly 20% in fiscal 2009-10. According to Mr. Jindal, further recovery will take place not only in steel, cement, automobile and engineering sector but India’s food processing industry will grow reasonably as value addition to it will grow faster with focus on processing. Its reflection will become visible in 2010-11 in which India’s growth especially on export front will multiply because it will by then emerge a stronger economy to give tougher competition in Indian sub-continent including China. However,
the assessment of the ASSOCHAM concludes that since from all angles, 2009-10 will
be tougher not only India’s exports will suffer but its overall GDP growth
will shrink, posing tough challenge to policy makers to come out with policy packages
for industry to keep it immune from global shocks.
( editor@thesynergyonline.com)
EPCES HOLDS MEET WITH DGFT FOR FORMULATION OF NEXT FTP FOR 5 YEARS Thesynergyonline Economic Bureau NEW
DELHI, MARCH 27 : A delegation comprising Mr A.K. Jain, Regional Chairman, EPCES, Dr. L.B. Singhal, Director General, EPCES, Mr D.P. Nanda, General Manager, Moser Baer India met Mr R.S. Gujral, DGFT and submitted suggestions of the Council for consideration. At the meeting,Mr Amitab Jain, Addl.DGFT, Mr Sanjay Rastogi, Export Commissioner, Mr O.P. Hissaria, Jt.DGFT, Mr G. Muthuraja, Under Secretary, Ministry of Commerce & Industry, and other officers of the DGFT, Ministry of Commerce were also present. Welcoming the members at the meeting, Shri R.S. Gujral, DGFT said that this meeting has been convened to consider suggestions for formulation of next Foreign Trade Policy for a period of 5 years. He informed that this exercise is continuation of efforts of simplifying procedures and updating Foreign Trade Policy so that it helps in reducing transaction costs. Dr Singhal said that 100 per cent EOUs have played a catalytic role in creation of manufacturing capacity in the country, increasing exports and providing employment. The income tax benefit granted to them under section 10Bof the Income Tax Act is slated to expire by March 31, 2010. Keeping in mind the contribution made to the manufacturing sector and to exports by the EOUs, there is an urgent need to extend the benefits granted under section 10B for a further period of three years. Dr. L.B. Singhal, Director General, EPCES further said that the scope of Minimum Alternate Tax has been extended to Section 10A and 10B in the Finance Bill 2007 and accordingly MAT has been made applicable to 100% EOUs as well, he added. EOUs which have been promised 100 per cent exemption from income tax should not be subjected to any income tax under any other provisions including Minimum Alternative Tax. Since MAT is a kind of advance tax which is to be adjusted in a period of 7 years, it is suggested that keeping in mind the present difficult situation, faced by the exporters, EOUs should not be asked to pay advance tax in the form of MAT and tax should be collected as and when it becomes applicable , he said. He further mentioned that the following issues need immediate consideration while formulating next Foreign Trade Policy for a period of 5 years: ISSUES RELATING TO EOUs 1) Doing away with the procurement certificate 2) Doing away with the cost recovery charges 3) Payment of Education Cess 3 times by EOUs 4) Cenvat Credit to EOUs in respect of all components of excise duty for the goods cleared from EOU to DTA 5) Licence issued under Section 58 and 65 of Customs Act 6) Extending benefits of Vishesh Krishi & Gram Upaj Yojana Scheme, Focus Market Scheme, Focus Product Scheme and Hi-tech Export Promotion Scheme to all EOUs (Para 3.8.2.1, 3.9.2.1, 3.10.2.1, 3.11.2.1 of FTP) 7) Extending the benefit of Hi-Tech Product Scheme to Instruments & Apparatus for measuring or detecting ionizing Radiations (Tariff # :9030.10) (Paragraph 3.11 of FTP) 8) Definition of “capital goods” to be amended to include “dry dock”
9) The duty should be refunded by way of All Industry Rate of Duty Drawback (Paragraph 6.14(b)(i) of FTP) 10) Exemption from CST and Service Tax 11) Permission for carrying out job work for DTA units (Paragraph 6.14(b)(i) of FTP) 12) Operationalization of provisions of Paragraph 6.9(e) of Foreign Trade Policy 13) Amendment of Section 6.2 (f) of the foreign trade policy to permit
15) Amendment in Para 6.13 permitting inter unit transfer of raw materials, among EOUs of same company 16) Amendment in HBP para 6.34(5) to provide for diversification in addition to broadbanding within the same unit 17)
Para 6.8.4 of Hand Book should be suitably amended or clarification should be
issued to permit utilization of IT facility in ISSUES RELATING TO SEZs 18) Extension of Focus Market Scheme to SEZs (Para 3.9.2.2(b) of FTP) 19) Extension of Focus Product Scheme to Gems & Jewellery Sector and extending these benefits to SEZs as well. (Paragraph 3.10 of FTP) 20) Extending benefit of Market Linked Focus Product Scheme to Gems
& Jewellery Sector and extending the same to SEZ units. (Paragraph 21) The exports made by Handicraft SEZ units should be taken into account for the benefit of VKUGUY (Para 3.8 of FTP) 22) Additional Duty of Customs (in lieu of Sales Tax/VAT) After
presentation of Council, Mr Gujral assured that suggestions made by EPCES shall
be looked into positively. EPCES HAILS MoF DECISION TO EXEMPT ALL TAXABLE SERVICES RENDERED TO SEZ UNITS , SEZ DEVELOPERS Thesynergyonline Economic Bureau NEW
DELHI, MARCH 05 : Dr. L.B. Singhal, Director General, Export Promotion Council for EOUs and SEZs (EPCES), stated that this is a welcome step as Ministry of Finance has implemented the decision taken by EGoM relating to SEZ. Dr. Singhal informed that though Section 26(1)(e) of the SEZ Act clearly provided exemption from service tax to a SEZ developer or SEZ unit, for the authorized operations of these entities, the field authorities were provided exemption from service tax only if the services were rendered within the SEZ. This interpretation was being given based on Ministry of Finance Notification No. 4/2004-ST dated 31/3/04. Now Ministry of Finance has issued this notification wherein it has rescinded the earlier Notification No. 4/2004-ST and provided exemption from service tax for all services rendered to a unit or a developer, for its authorized operations, even if these services are rendered outside the SEZ as these services are relating to authorized operations of these entities. He stated that it is a welcome movement forward, he added. Dr. Singhal stated that to start with it is a good development that this procedure has been put in place. However, he requested that for making it more effective it would be appropriate if following suggestions are considered by Ministry of Finance:-
Dr. Singhal stated that SEZ Act provides ab-initio exemption from service tax
whereas the notification has provided exemption from service tax by way of refund
of service tax. Hence, service tax has to be paid first and then refund has to
be claimed. It would result into unnecessary blockage of funds, paper work and
transaction cost. Hence it would be appropriate if ab-initio exemption could be
provided. At
present services within the SEZ are in any case provided exemption from service
tax. This needs to be clarified that on services rendered within SEZ, no service
tax is to be paid , he stated. Notification
provides that refund has to be taken from respective jurisdictional Assistant
Commissioner of central excise or Deputy Commissioner of Central Excise. Dr. Singhal
strongly emphasized that SEZ intends to provide single window mechanism. Hence,
refund should be provided either from the office of the Development Commissioner
in the Zone or from Customs officer posted in the Zone. SEZ units or developers
must not be asked to go outside the SEZ for taking this refund. With this mechanism
single window facility intended in the SEZ has been dealt a severe blow. Dr.
Singhal further stated that in the notification no time frame has been provided
for refund of service tax. A specific time frame of maximum 7 days should be provided
and in case there is a delay then a provision of payment of interest should be
incorporated as has been done in the case of refund of duty drawback, CST etc. Dr. Singhal stated that this notification has been made applicable from the date of publication of this notification. He stated that SEZ Act has provided exemption from service tax from the date of operationlization of SEZ Act i.e. 10-2-2006. Other EGOM decisions like benefit of DEPB/refund of duty I lieu of drawback for supply of goods to SEZ developers against Indian rupee have been made applicable from 10-2-2006. Similarly this refund of service tax should also be available from the date of operationalization of SEZ Act i.e. 10-2-2006. ( editor@thesynergyonline.com) ANOMALY REMOVAL IN SECTION 10AA OF I - T ACT A POSITIVE DEVELOPMENT ; EPCES Thesynergyonline Economic Bureau NEW
DELHI, FEB 25 : Dr. L.B. Singhal, Director General, EPCES welcomed this step and stated that this is a positive development as after almost 3 years of operation of SEZ Act, which was made operational from February 10 ,2006 . This has been recognised in the Parliament of India that there is a anomaly in Section 10AA of the Income Tax Act. However, SEZ units would still have to wait till an actual amendment is carried out. Dr.Singhal stated that he personally felt that it would have been very useful if this uncertainity could have been removed straightway and if this anomaly could have been removed through a clarification. Dr.Singhal elaborated that from the very beginning of the SEZ Act it was quite clear that this a kind of inadvertent error as Section 10AA at present compares export turnover of the unit with the total turnover of the assessee. This is amounting to comparing two incomparables. Hon’ble Finance Minister as Chairman of EGOM has rightly appreciated that export turnover of thew unit should be compared with the total turnover of the undertaking instead of total turnover of the assessee. Dr.Singhal urged that this uncertainity shold be removed and at present a clarification should be issued as was done in the case of Section 10A for STPI, erstwhile EPZs and Section 10B relating to EOUs in the year 2000. Prior to 2000 in both Section 10A and Section 10B word used total turnover of the assessee and CBDT had issued a circular No.794 dated August 9 ,2000 clarifying that export turnover and the total turnover for the purpose of Section 10A and Section 10B shall be of the undertaking located in the specified zone and this shall not have any material relationship with the other business of the assessee outside these zones. Dr.Singhal
stated that a clarification of this nature at present specifically keeping in
mind the present gloomy global scenatio would be very helpful for SEZ Units and
for bringing fresh investments in the SEZs. This would remove uncertainity straightway.
INDIA'S PLASTICS EXPORTS TO CONTINUE TO GROW BY 10 %
NEW
DELHI, FEB 07 : The speakers were unanimous in highlighting that the global downturn is indicating a positive sign for emerging economies like India in plastics sector. The world is now shifting focus from developed economies to Asian region on these verticals. S K Ray, Chairman Conference Committee, in his welcome note said, "The road ahead could be rough and painful but the emerging economies should use this phase to strengthen their position through initiatives such as technology upgradation, consolidation etc. He believed that major Asian economies like India will continue to grow despite global slowdown". Emphasising on the Indian scenario, he further mentioned that demographic profile and social transformation are raising the aspiration of a huge consumer class in India. Growing income, access to credit and a desire for better living standards have spurred demand for a variety of consumer goods. Impact of these is steadily and directly felt in the plastic industry." Bijoy
Chatterjee, Secretary, Chemicals & Petrochemicals, Ministry of Chemicals &
Fertilizers, Government of India said, "We feel that plastic Arvind Mehta, president, Plastindia Foundation* mentioned, "A change in mindset from economy of scale to knowledge-based competency is the need of the hour. A switch from products and services to systems and supply chain management must be integrated to serve customers better." Dr. Rajiv Kumar, Director, Director and Chief Executive, Indian Council for Research on International Economic Relations, cautioned gathering by mentioning that a 'V' shape recovery from the current downturn may be difficult to imagine and observed that things should change by end of year 2009 and growth would begin in 2010. Dr. Kumar's advice was to 'utilize this period for reformation, consolidation and removing the hurdles' John R Verity, Vice President, Polyolefins Global Business Unit, ExxonMobil Chemical company,"The market demand will present historical opportunity for penetration, particularly of plastics and chemicals, into end-products markets such as automotive, packaging, construction and health & personal care. This will be concentrated in developing nations like India, where the growth has been rapid and billions of people require access to growing quantities of energy. Stressing on the potential in the Indian market, he further mentioned that India is a perfect example of tremendous untapped opportunity. The growing demand will require us to continue to develop new facilities and expand on current ones. But the growing demand emphasizes the need for sustainable development to be an integral part of business. The overall objective of the international conference was to bring together members of global and Indian plastics industry. Economist, Consultants, Technical experts, Business professionals and Academics from plastic fraternity. It discussed the knowledge explores global trends, innovations and opportunities. The other key speaker who contributed in the conference were Mr. V.B. Lall, co-chairman, International Conference Organizing committee. ( editor@thesynergyonline.com) KAMAL NATH GIVES AWAY EPCES EXPORT AWARDS TO EOUS AND SEZ UNITS Thesynergyonline Economic Bureau NEW
DELHI, FEB 04 : He presented export awards to 50 prominent EOUs and SEZ units in various categories comprising gem and jewellery, engineering, plastic products, electronic, computer hardware, services, readymade garments, handicrafts, chemical and allied products, textile products, food products etc. The prominent awardees included Sterlite Industries (Rs.3862.28 crore) , Nokia India (Rs.1650 crore), Hind Agro Industriers (Rs.395.82 crore) , Gokaldas India (Rs.613.16 crore), Jindal Saw (Rs.1159.39 crore), Hewlatt Packard India Software Operations (Rs.594.71 crore), Infosys Technologies(Rs.424.05 crore), Moser Baer India (Rs.1711.89 crore), Dr.Reddy's Laboratories (Rs.971.07 crore), Inter Gold (I) (Rs.471.81 crore), South Asian Petrochem . (Rs.662.14 crore), GE India Technologies (Rs.394.68 crore), P.P. Jewellers (Rs.199 crore), P.C. Jewellers (Rs., 135.15 crore), Igarashi Motors (Rs.216.48 crore) etc. Mr Kamal Nath, Minister for Commerce & Industry said that when he took charge as Commerce & Industry Minister in 2004, when UPA came to power, exports from EOU/SEZs in the year 2003-04 were to the extent of Rs.42,641 crore and their contribution was 14.54 per cent in India's total exports of Rs.2,93,367 crore. He said that in the year 2007-08 the exports from EOUs and SEZs have gone up from Rs.42,641 crore to Rs.2,21,066, showing growth of 418 per cent in 4 years. These exports represent growth of 5.18 times in 4 years. India's total exports in this period has gone up from Rs.2,93,367 crore to Rs.6,25,471 crore. He congratulated SEZs and EOUs because contribution of SEZs and EOUs in national exports have gone up from 14.54% in 2003-04 to 35.34 per cent last year. This shows that EOU/SEZ Schemes are gradually playing an increasing role in India's exports and thereby contributing more towards increasing employment, encouraging manufacturing and encouraging value addition in the country. Dr.L.B. Singhal, Director General, EPCES informed that exports from EOUs and SEZs have gone up from Rs.33,647 crore in 2002-03, when this Council was constituted, to Rs.2,21,066 crore in 2007-08 and the exports from EOUs and SEZs are likely to cross Rs.2,50,000 crore this year. He further informed that contribution of EOUs and SEZs in national exports have gone up from 13 per cent in 2002-03 to approx. 35 per cent in 2007-08. This shows that EOUs and SEZs are gradually playing an increasing role in providing employment, increasing exports, creating manufacturing capabilities in the country and accelerating the process of inclusive growth. Mr R.K. Sonthalia, Chairman, EPCES informed that during the year 2007-08, the share of EOU/SEZ exports to national exports was 35 per cent. He said that at present EOUs and SEZs are facing a lot of problems because of global economic scenario. In order to help SEZs to tide over these problems, he requested that decisions taken in EGOM should be implemented and guidelines/amendments should be issued in respect of issues like Carrying out amendment in Section 10AA of the IncomeTax Act ; Declaration of SEZs as Infrastructure ; Notifying procedure for providing refund of service tax, for the services rendered even outside the SEZs, for SEZ units and SEZ developers, so long as service is related to authorized operations of SEZ units/Developers ; Notifying procedure for grant of duty drawback for supply of goods from DTA to SEZ developers against Indian rupee. He further urged that SEZs should be allowed sale in DTA based on duty foregone basis ; SEZs should be given the benefit of focus market scheme ; He also urged to take steps for EOUs like extending sunset clause (income tax exemption under Section 10B of Income Tax Act) by another 3 years i.e. from March 2010 to March 2013 ; removal of Minimum Alternative Tax (MAT), imposed on the EOUs in the year 2007 ; Extending the benefits of Focus Product Scheme, Focus Market Scheme, Vishesh Krishi & Gram Upaj Yojana Scheme to all EOUs irrespective of whether the benefit of income tax is being availed or not. The
Awards function was also attended by G.K. Pillai, Commerce Secretary, R. Gopalan,
Additional Secretary, Ministry of While proposing vote of thanks, Mr Jatin R. Mehta, Vice-Chairman, EPCES thanked Mr Kamal Nath Minister for Commerce & Industry and assured that EOU/SEZ sector would make every effort to achieve the export targets set by the Government. Exports from SEZs and EOUs were to the extent of Rs.2,21,066 crore in 2007-08, as against Rs.33,647 crore in 2002-03, when this Council was constituted. Exports from these units likely to cross Rs.2,50,000 crore this year. The contribution of SEZs and EOUs in the national exports have gone up from 13.5 per cent in the year 2002-03 to 35 per cent in the year 2007-08. SEZs and EOUs provide direct employment to approx. 15 lakh people. Exports from SEZs likely to touch Rs.1,00,000 crore this year. tHE incremental investment of over Rs.90,000 crore has taken place in the SEZs in the last 3 years. SEZs
have provided incremental direct employment to over 2,27,000 people in the last
3 years. Indirect employment provided by SEZs is 3 to 5 times of this number.
Hence, SEZs have created over 9,00,000 employment. More
than 85 per cent of the production from SEZs and EOUs are exported. (
editor@thesynergyonline.com)
FiNMiN EXTENDS CENVAT FACIILITY FOR SUPPLY OF GOODS FROM DTA TO SEZ DEVELOPERS Thesynergyonline Economic Bureau NEW
DELHI, JAN 03 : Mr
Singhal, Director General, EPCES stated that on receipt of representations from
SEZ Developers informing that for supply He had agreed to take up this issue in the Empowered Group of Minister (EGOM) meeting, under the Chairmanship of Mr Pranab Mukherjee, Minister for External Affairs. Accordingly this issue was taken up in the EGOM meetings and EGOM had agreed that this facility would be extended for supply of goods to the SEZ developers and the amendment would be carried out in the Cenvat Credit Rules. Accordingly, Ministry of Finance has issued Notification No. 50/2008-CX(NT) dated 31/12/2008 wherein Ministry of Finance has extended the facility of Cenvat Credit for supply of goods from DTA to SEZ developers. Mr Singhal stated that this would encourage domestic manufacturers to supply goods to SEZ developers at competitive rates and thus motivate SEZ Developers to procure their inputs like steel, cement etc. from domestic manufacturers instead of importing. This would help in backward integration of SEZ with domestic economy. This would lead to generation of additional economic activity in domestic market. Mr. Singhal further urged that other decisions which were taken by the EGOM in August 2008 and October 2008 should also be implemented immediately so that investment in the SEZ could be accelerated further. He
stated that EGOM in first week of August had decided that for supply of goods
from DTA to SEZ units and SEZ developers, service tax would be refunded, irrespective
of whether the service is rendered inside or outside the SEZ so long as the Similarly, EGOM has also decided to recommend to RBI that SEZs should be treated as infrastructure project rather than real estate project. He stated that in respect of these 3 major issues the guidelines are yet to be issued inspite of the fact that decision in respect of these issues were taken in August and October 2008. He also stated that EGOM has also discussed the issue relating to Section 10AA of the Income Tax Act and this issue is also required to be resolved at the earliest.
He stated that earlier resolution of these issues would help in further bringing
investment and employment in the SEZs wherein the investment of over Rs. 90,000
crore has already come in the last 2 ½ years and where additional incremental
direct employment of 250,000 people have been created in this period. ( editor@thesynergyonline.com)
RBI TO CATEGORISE SEZs, IPs UNDER INFRASTRUCTURE HEAD TO SPUR UP EXPORTS : D.G., EPC, EoUs & SEZs Thesynergyonline Economic Bureau NEW
DELHI, DEC 03 : Mr. Singhal, therefore, suggested that the RBI should immediately implement decision of Group of Ministers (GoM) to bring SEZs and IPs under purview of infrastructure, especially when centre has already issued a directive to RBI. The Director General, Export Promotion Council for EOUs and SEZs during Interactive Session with ASSOCHAM members here today pointed out that in the last 35 years, Rs.8000 crores of exports were effected through various SEZs. However, after the SEZ Act of 2005, exports activities through number of SEZs and IPs were held to an extent of Rs.66,000 crore and their exports by end of current fiscal would reach over Rs.1 lakh crore. The
SEZs and IPs that are currently operational have a total investment amounting
Rs.94,000 crore and providing 3.62,000 direct employment to various people and
therefore, their categorization under infrastructure head is the right call given
by the central government to premier apex bank – the RBI as it is this institution
which is empowered to In a bid to spur up exports through SEZs and IPs, the SEZ and IPs would be exempted from the service tax and a notification to this effect would shortly be issued, said Mr. Singhal, clarifying that the Central Government has already decided to provide service tax exemptions to SEZs for services they are providing outside the SEZs. Mr. Singhal also said that the Department of Commerce and Industry is also finalizing a notification in consultation with the Ministry of Finance to provide Duty Entitlement Passbook Scheme (DEPB) as well as Duty Drawback benefits to SEZs and IPs. In addition, the Ministry of Finance is also coming out with directives to provide CENVAT credit benefits for manufacturing of various articles within SEZs, he added. According to him, India would extend these benefits to its SEZs and IPs as their are total 138 countries that have such facilities for their SEZs and IPs which have created direct employment for 68 million people with investments of US$ 1600 billion and export worth of US$ 750 billion. Mr. D S Rawat, ASSOCHAM Secretary General complimented Mr. Singhal for disclosing the government decision for directing RBI to bring in SEZs and IPs under purview of infrastructure as it has become necessary to push up exports at times when these are sinking. Among
others who attended the conference included Mr. B Vijayan, Development Commissioner,
MEPZ, Special Economic Zone, Chennai, Mr. S Ramasundaram, CMD, Tamil Nadu Industrial
Development Corpn., Mr. R Sannareddy, Chairman, Sri City Pvt. Ltd., Mr. Srinivasan
K Swamy, President, Madras Chamber of Commerce & Industry and Mr. Murali Venkatraman,
Chairman, ASSOCHAM Southern Region Development Council.
( editor@thesynergyonline.com)
SLOWDOWN TO IMPACT EXPORTS BY 20% Thesynergyonline Economic Bureau NEW
DELHI, NOV 09 : The latest analysis of the ASSOCHAM on Realistic Exports Vs The Targeted One of US$ 200 Bln for 2008-09, adds that 7 key export segments such as textiles, apparels, gems & jewellery, diamonds, brassware, handicrafts and leather are already reeling under recessionary trends to sustain their past export buoyancy. These put together constitute the highest export volumes in India’s total exports from economies of scale such as America, EU and ASEAN. As a result of global slowdown especially in these economies, India’s export market got reduced substantially and on the other hand, domestic pressures of prevailing economic conditions on textiles, diamonds, brassware, handicrafts, carpets etc. is too heavy. Naturally, these sectors will not be able to generate their previous export momentum as a result of which the ASSOCHAM anticipates a minimum of US$ 40 billion exports shortfall for current fiscal. According to India’s Foreign trade policy for current fiscal, the export targets fixed for 2008-09 are to an extent of US$ 200 billion. In a statement issued here, ASSOCHAM spokesman said that its true that in the first couple of months of current fiscal, performance of merchandise exports which include grains, raw jute, petrochemicals has not been that bad but the fact is that the merchandise exports do not bring as much foreign exchange as are brought in by high value added products such as readymade garments, diamonds, jewellery, gems, carpets, handicrafts and brassware etc. These exports are effected in markets of extremely higher value where other domestic exports are hardly penetrated and that is why, the ASSOCHAM is in general pessimistic on exports scenario especially towards markets of economies of scale. Besides, slowdown syndrome the other reason as to why Indian exports would receive a drubbing in 2008-09 as ocean freight rates are also rising, rupee dollar exchange rate is weakening, recession not only in US and European markets is deepening and as a result, exports are subjected to certain restrictions. The ASSOCHAM analysis, however, adds that exports that would have reasonably good prospects would improve pharma and chemicals, heavy engineering, metal and marine products, besides FMCG, as these sectors continue to command demand not only in domestic market but on export fronts too in economies of Middle East, Far East and African continent including SAARC region. The
other factors that have eroded costs and competitiveness of Indian exports including
rising input costs which is not falling and secondly, power and infrastructure
remain a problem for Indian manufacturing. India is still far behind on logistics as a result, the transaction cost of exports are rising and even reached around 20%, according to latest estimates. All these factors have also rendered Indian exports non-competitive as India is facing stiff competition on export fronts not only from China but also countries like Bangladesh, Sri Lanka, Pakistan and even Bhutan. As a result of tough competitions posed by these countries towards India, its traditional exports have suffered in the past which will continue to suffer even in future until exporters make amends to their products by technology infusion, concludes the ASSOCHAM analysis. (npsinha@thesynergyonline.com). Click here for Home page |
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