SEZ tax benefits extended to sub-contractors

The commerce ministry today amended rules governing the Special Economic Zones (SEZs). About 16 amendments to the rules were incorporated in the SEZ rule book, catering to various demands of exporters and developers operating in the tax-free industrial enclaves for exports.These include allowing reimbursement of duty through the Duty Drawback Scheme to suppliers outside SEZs even if payment is made in rupees. Duty Drawback enables exporters to claim back taxes paid while importing, or any other local taxes paid. Tax benefits enjoyed by developers and contractors are now being extended to sub-contractors, who are engaged in developing an SEZ.In addition, the new rules allowed SEZ developers to provide housing to staff and workers within the tax-free enclaves. Gems and jewellery, one of the most affected segments due to the economic slowdown, has been given some relief.These units will be allowed to bring back consignments, which have been found to be defective by the overseas buyer, or refused payment.