Law Min's views to be sought on SEZ vacant land issue

The Commerce Ministry will seek opinion of the Law Ministry to define 'vacant land' on which a developer can build an SEZ that can avail of tax incentives for its units. After it gets views of the Law Ministry, the Commerce Ministry would leave the decision on the contentious issue to the empowered Group of Ministers, which is likely to meet again in the next few weeks, sources said. The issue of 'vacant land' cropped up after the Revenue Department in the Finance Ministry detected that some developers, particularly in Gujarat had started their Special Economic Zones on land which was already developed. This, according to the Revenue Department, violated the SEZ Act which required that a tax-free zone could come up only on 'vacant land' with the objective to prevent shifting of units from existing locations to SEZs. However, the Commerce Ministry differed with the assessment of the Finance Ministry on the ground the minor development work like laying of roads etc, should not be treated as 'developed' land. The eGoM on SEZ, headed by External Affairs Minister Pranab Mukherjee, met in New Delhi on 7th August but made no change in the policy for the tax-free enclaves, including retaining the land ceiling for a zone at 5,000 hectares. While the issue of vacant land was "discussed comprehensively" in the eGoM, no decision was taken on the matter, the official said. "The eGoM is likely to meet again in the next 15-20 days, during when the issue of 'vacant land' would be taken up," he said.

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