SEZ online chat
The SEZ fever is upon us. Dont expect Shenzhen / Pudong / Hainan / Sharjah / Jebel Ali style cities in these SEZs ? They will be mostly small units enjoying unprecedented tax benefits (estimated direct tax loss to government is 90,000 crores) walled off from the surrounding unfortunate non-SEZ areas. Is this economic aparthied ? You decide.
Chat with SEZ officials
In the meantime, the government has an online chat where you can ask questions to SEZ officials at http://www.sezindia.nic.in/ and http://commerce.nic.in/ If you cant access these sites try : http://dippserver1.nic.in/commerce_chat/welcome.html
I went online and left a few questions for them. I will post replies when someone answers them.
Consider this tax scheme for Chinese SEZs (details).
- No tax in startup years (when you dont make a profit).
- The year you make a profit is “year one”. Your tax clock starts now.
- Year one and two after your tax clock starts – you pay NO TAX
- Year three and four after – you pay 50% TAX
- Year five onwards – you pay FULL TAX
This my friends is China. Contrast with Indian SEZ (more details).
- Note: Most SEZ units (esp IT Services) are hugely profitable from day one
- 100% TAX FREE for the first 5 YEARS (even for already hugely profitable units just emerging from the STPI tax holiday scheme – eg, Infosys, Wipro, TCS, etc)
- 50% TAX FREE for the next 5 YEARS
- Open ended tax rebates thereon subject to ploughback of profits
- Excise duty and Import duty exempted
Side note: Does anyone know of any country in the world that has private SEZs ? All of Chinas SEZs are huge (eg, Pudong, entire province of Hainan, etc) and setup by the government.
Think about this : SEZs are allowed to build golf courses, hotels, shopping, schools, and educational institutions inside their “walled hectares”. I wonder if those unfortunate enough not to be employed by an SEZ unit (read 90% of India) can access these facilities freely.
Unfortunately, I dont have too much time at the moment to write more. I had written another post about this earlier.