With the finance ministry opposing extension of tax incentives for export-oriented units (EoUs) beyond March 2009, Commerce & Industry Minister Kamal Nath will take up the issue with Prime Minister Manmohan Singh in the next fortnight.
As of now tax exemption to 100 per cent EoUs is available for exports up to March 31, 2009. However, the ‘Sunset Clause’ under Section 10B of the Income-Tax Act envisages that EoUs would cease to avail tax incentives after March 2009. Exporters have been demanding scrapping of ‘Sunset Clause’ so that they could continue to enjoy tax holiday.
Commerce ministry has been pressing for extending the tax incentives beyond 2009 with the finance ministry without success. “We have not given up the efforts and we will discuss the issue with the Prime Minister in the next fortnight,” Mr Kamal Nath said at a conference of the Export Promotion Council for EoUs and SEZs. Mr Kamal Nath said all the government departments should realise that the special economic zones would be crucial when the Indian economy becomes more open after a slew of free trade agreements coming into force.
He asked SEZ and EoU developers to persuade the Finance Ministry as well for tax incentives.
