MAYTAS VENTURES APPROACHES GOVT TO SURRENDER ITS SEZ
New Delhi
The Economic Times The Statesman The Financial Express The Hindu The Hindu Business Line
Financially "poor" Maytas Ventures has approached the Centre to surrender its SEZ in Andhra Pradesh, citing economic slowdown and also requested for waiver of over Rs 31 lakh benefit it had availed during the setting up of the project.
Maytas Ventures SEZ Pvt Ltd has approached the Commerce Ministry for surrendering its 14.15 hectare sector-specific SEZ in Ranga Reddy district in Andhra Pradesh.
"The developer has submitted that due to financial recession they have decided to get their SEZ denotified," a source said, adding that the case would be take up by the Board of Approval (BoA) meeting on August 11.
Though the developer has not availed any exemption towards customs duty, excise duty and sales tax for their SEZ but has availed service tax exemption.
"They have availed service tax exemption for Rs 31,46,550 ... requested to waive off (need) to refund the said service tax.. in view of poor financial position," the source said.
Maytas, promoted by kin of B Ramalinga Raju - founder of Satayam Computer, has plans to set up six IT/ITeS SEZs in Andhra Pradesh of which three zones have already been notified by the government and rest are in the process of being granted formal approvals.
The developers of these SEZs are Maytas Enterprises, Maytas Ventures and Maytas Hill Country SEZ. Maytas Enterprises has also been granted one year extension to set up its IT/ITeS SEZ in the Ranaga Reddy district.
BOA TO MULL 5 SEZ PROPOSALS ON AUGUST 11
New Delhi
Business Standard The Economic Times (Delhi edition)
The Commerce Ministry will consider on August 11 five proposals for setting up SEZs, including those of Brooke Bond Real Estates and Deccan Infrastructure.
The 19-member inter-ministerial Board of Approval (BoA) headed by Commerce Secretary Rahul Khullar may also give formal approval to 25 developers who have been given more time to execute their projects.
The Board would also take a decision on requests of Lanco Solar and Cochin Airport International to set up special economic zones (SEZs), a source said.
Brooke Bond Real Estates plans to set up an IT\ITeS SEZ over 11 hectare in Karnataka, while Deccan Infrastructure has moved the BoA for permission to develop two tax-free zones in Andhra Pradesh.
The developers, including Ansal SEZ in Gurgaon (Haryana), Ranbaxy Laboratories in Mohali (Punjab) and Maytas Enterprises in Ranga Reddy (Andhra Pradesh), who have been given one-year additional time to go ahead with their projects, may get formal approval for the extension, sources said.
Two developers - Maytas Ventures and Sanvo Resorts - have requested the BoA to de-notify their projects.
So far 576 formal approvals have been given for setting up SEZs, of which 319 have been notified. Exports from SEZs grew by 36 percent to Rs 90,416 crore in 2008-09.
IT COMPANIES RECONCILING TO PAY MORE TAX AS STP EXEMPTION ENDS
Shamik Paul/Adith Charlie, Bangalore/Mumbai
The Hindu Business Line
IT firms such as TCS, Infosys and Wipro expect their effective tax rates to go up in the coming years as more of their delivery units come out of Software Technology Parks of India.
This would further impact the net profit of these companies, already under pressure because of the global economic crisis.
The actual taxes paid by a corporate divided by the net taxable income expressed as a percentage, gives the effective tax rates.
The vendors setting up delivery units in Software Technology Parks (STPs) enjoy a tax holiday for 10 consecutive years. However, after that period, they are no longer eligible for the exemption. The latest Budget gave the STPI scheme an extension of one more year; it will now end in March 2011. The extension will not benefit units that are more than 10 years old.
Infosys Technologies, which had an effective tax rate (ETR) of 17 percent last fiscal, expects the ETR to touch 20 percent this financial year.
“It is a natural conclusion that the ETR will go up in the next few years as more of our units come out of STPI,” said V. Balakrishnan, Chief Financial Officer, Infosys.
The company estimates its ETR at 24-25 percent in the next fiscal. “However, it is difficult to say because the tax rate would depend on how much of our growth will go into the SEZs,” Balakrishnan added.
For many companies, most expansion is happening in SEZs, which provide tax benefits on all profits from export for the first five years, and tax breaks for 50 percent of profits from exports in the next five years.
However, some companies might find it difficult to start work in an SEZ because it is more cost-intensive. Country’s largest software exporter TCS also expects its ETR for the fiscal to rise from 14.34 percent in 2008-09.
“We expect it to go up to 17 percent by the end of the current fiscal. Apart from this (the STPI ceiling), we do not see any other reason for the effective tax rates to go up,” S. Mahalingam, CFO and Executive Director, TCS, said.
For the quarter ended June 2009, Wipro had an ETR of 15.5 percent.
“We expect the ETR to be in the range of 15.5 percent for the remaining quarters. For fiscal 2011, we expect it to increase 100-200 basis points,” said a Wipro spokesperson.
Apart from the top companies, the small and mid-size firms also expect their ETR to go up. MindTree Ltd, which had an ETR of 12-13 percent in fiscal 2009, expects it to go up by two percentage points to about 15 percent this fiscal.
Sonata Software also expects its ETR to go up, but marginally. "We have some of the units coming out of STPI. But for us many are still within STPI," said B. Ramaswamy, Managing Director, Sonata. The effective tax rate currently is about 8-9 percent, he added.