Finance minister Pranab Mukherjee has proposed to levy MAT of 18.5% on the book profits of SEZ developers and units. The changes in the tax rate would be effective from April 2012
New Delhi: Expressing "surprise" at the budget proposal to impose minimum alternate tax (MAT) on special economic zone (SEZ) developers, commerce and industry minister Anand Sharma today said he has voiced his concerns to finance minister Pranab Mukherjee as the move would impact these projects, reports PTI.
Mr Mukherjee has proposed to levy MAT of 18.5% on the book profits of SEZ developers and units. The changes in the tax rate would be effective from April 2012.
Both developers, as well as units in the tax-free enclaves, were earlier exempted from MAT under Section 115 JB of the Income Tax Act.
"I have discussed this (with Mr Mukherjee) and I have written to the finance minister... It was a surprise and for the developers, surely it is a matter of concern," Mr Sharma told reporters here.
The minister was surprised because MAT was scheduled to be imposed on SEZs when the Direct Taxes Code (DTC) is rolled next year.
He, however, said that the finance minister has assured him that the benefits and concessions that were available to the developers until 2012 and units until 2014 will be there.
"Our understanding has been that we will try to align it (imposition of MAT) with the coming in of the DTC," he added.
MAT was introduced in 1987 to bring companies that paid no or very little tax, after taking advantage of the exemptions provided by the Income Tax Act, into the tax net.
The government has also proposed to impose dividend distribution tax on SEZ developers, which would come into effect from June this year.
Exports from SEZs contribute about one-third of the country's total exports. Shipments from these zones during April-December 2011, grew by 47% to Rs2,23,132 crore vis-à-vis the same period last year.
Under the SEZ Act, units get 100% tax exemption on profits earned for the first five years, while developers get exemption for ten years. Additionally, units get a 50% exemption for the next five years and another 50% exemption on re-invested profits in the following five years.
So far, 582 SEZs have been formally approved by the Board of Approval (BoA), of which 130 are in operation. SEZs have emerged as major sources for attracting investment and increasing exports in the country.
Finance minister Pranab Mukherjee in his budget has marginally raised the MAT from 18% to 18.5% on companies' book profits.
Tax enforcement agencies are trying to locate properties of Hasan Ali Khan abroad which could be attached or auctioned to extract from him a huge tax liability to the tune of Rs40,000 crore
Mumbai: Pune-based real estate consultant and stud farm owner Hasan Ali Khan, who is alleged to have stashed away over $8 billion in Swiss banks, is likely to appear before the Enforcement Directorate (ED) on 7th March, reports PTI.
The agency recently sent a notice to Mr Khan, who is under investigation for money laundering and for allegedly transferring cash/valuable assets outside the country by unlawful means with the help of foreign nationals.
Mr Khan had appeared before Income Tax (I-T) authorities here on 18th February apparently in connection with notices issued to him on 31 December 2008, over alleged huge tax evasions following undisclosed funds in several foreign bank accounts, including $8 billion in an account in the Zurich branch of UBS. However, UBS had denied any business relationship with Mr Khan.
Tax enforcement agencies are now trying to locate properties of Mr Khan abroad which could be attached or auctioned to extract from him a huge tax liability to the tune of Rs40,000 crore.
Earlier, in January 2007, the I-T department had raided Mr Khan's residence at Koregaon Park in Pune and had seized documents that showed that he had $8.04 billion in a UBS account in Zurich.
The raid followed a revelation that Mr Khan had allegedly concealed his income and not filed income tax returns since 1999. The department had also raided his properties in Mumbai and Hyderabad.
The CBI has roped in the Enforcement Directorate to help it in locating the money trail and violations of Foreign Exchange Management Act and stake-holding patterns in some of the firms which acted as front for other telecom companies
New Delhi: Zeroing on the criminal conspiracy relating to the second generation (2G) scam among corporates, the Central Bureau of Investigation (CBI) is preparing a list of all ineligible telecom companies which had got the licences in 2008, reports PTI.
Besides, the agency is conducting a "microscopic examination" of a deal between Tata Group's real estate and infrastructure development arm Tata Realty & Infrastructure and Unitech whereby the latter had received a loan, which the agency claims, have been diverted, official sources said.
Corporate lobbyist Niira Radia is likely to be summoned again to the CBI in connection with the case for allegedly playing an important role in the deal, they said.
The CBI has roped in Enforcement Directorate (ED) officials to help it in locating the money trail and violations of Foreign Exchange Management Act (FEMA) and stake-holding patterns in some of the firms which acted as front for other telecom companies.
Sources said the CBI has decided to send Letters Rogatory (LRs) to two countries-Cyprus and Norway-to find out source of funding of telecom firms who were awarded spectrum.
A Letters Rogatory is a formal request issued by a competent court to a foreign court and processed by the ministry of external affairs on behalf of the investigative agencies to obtain information about individuals and entities.
"A list of ineligible firms is being drafted and its findings on criminal conspiracy/culpability will be finalised within two weeks' time," a CBI official said.
The CBI, which has been directed to file a charge-sheet by 31st March by the Supreme Court, is likely to question DMK MP K Kanimozhi, the daughter of Tamil Nadu chief minister K Karunanidhi, in connection with the scam, they said.
Sources said CBI sleuths have found irregularities in funding Rs214 crore to Kalaignar TV, a regional channel operational mainly in Tamil Nadu in which Karunanidhi family members allegedly have majority stakes, by DB Realty.
Earlier, the CBI had questioned R Krishna Kumar and Sanjay B Ugale, chairman and managing director, respectively, of Tata Realty & Infrastructure and Anil Sardana, former CEO of Tata Teleservices Ltd.
The CBI had also questioned Sanjay Chandra of Unitech on issues relating to offloading of majority stake to Norway based company Telenor after getting 2G spectrum license.
The agency is probing whether Tata Real Estate had paid Rs1,600 crore to Unitech for a land deal at a time when the real estate company was applying for 2G licence in 2007.
The Comptroller and Auditor General (CAG) had in its report presumed losses to the tune of Rs1.76 lakh crore in distributing spectrum to certain telecom firms due to certain procedural lapses.