Easier forex obligation may knock at SEZ doors

The government can slacken foreign currencies positive Net (NFE) obligatin-which require that export earnings of the units in special economic rates

(SEZ) must be higher than the value of the entries imported - for certain categories of SEZ, including gems and jewels and textiles for the 6-12 following month.

One could also allow the units identified in SEZ to sell a quarter of their total production on the interior market without paying customs duties, secretary commercial that G K Plundered indicated.

The units of SEZ, however, will have to pay behind the exemption of right which they had appreciated on imported enters used the market products on the interior market to bring them to equal of the domestic producers.

The movement is aimed helping the zones survive the total reduction by selling part of their production on the interior market, which is better than the market of export. The concessions would be approved only for 6-12 month, the secretary commercial known as of the journalists Thursday.

Mr. Pillai specified the economic deceleration had started to take his toll on SEZ, with investments slowing down in last three months. The target of export of Rs 1, the crore 22.000 was also not very likely to be met.

We expect exports in value only Rs 1, the crore 00.000 this tax, it said. The potential of use of SEZs remained always high with 60.000-65, the additional labour 000 awaited to be used in the zones in April this year, it said.

One expects that approximately 40.000 of the additional labour are in the zones of IT/ITeS. The decision of the Prime Minister to slacken the section 10AA (7) of the Law of income tax to allow all SEZ, particularly those in IT sector, obtain the full exemption of income tax on benefit

is a stage towards encouraging SEZ, Mr. Pillai said.

One expects that the decision to slacken the engagement of NFE and to allow the sale of the goods of SEZ on the interior market without paying customs duties on the product is made by the Prime Minister - who also handles finances

booklet - after consultations with the qualified ministries. The sectors which will obtain the advantage must be strengthened still upwards.

One expects that the gems and the sector of jewels, where the value of the imported entries is high, are one of the primary education recipients. The sector of textiles also could obtain the relief because it took a serious beat on the market of export.