Companies may get to defer import duty in new economic hubs
tax sops and concessions for its proposed economic hubs — -which seek to transform the existing export-focussed special economic zones (SEZs) — as India pushes to become a part of the global value chains and attract manufacturing into the country. The finance, commerce and industry ministries have firmed up the contours of Development of Enterprise and Service Hubs, or DESH, which could allow companies to defer their import duty liabilities, among other concessions, officials privy to the deliberations told ET.
«Contours of the framework have been firmed up...,» a senior government official said. An expert committee set up by the commerce department in 2019 had suggested that the SEZs be converted into employment and economic enclaves (3Es) with the extension of tax sunset clauses, simplification of processes, tax benefits for the services sector, and extension of the schemes for micro, small and medium enterprises (MSME) to these zones.
Another senior official said the idea is to take advantage of the global supply chain shift and create the necessary ecosystem to draw in investment. «We are looking at drawing an entire ecosystem in a sector...One big-ticket player and the entire supply chain that can also support development of MSMEs and create jobs,» the official said, citing the example of telecom.
The revenue and the commerce departments have had protracted deliberations on the contours of the DESH framework. The first draft of the DESH Bill was circulated for stakeholder consultations about a year ago.
Following reservations of the revenue department on some of the measures proposed, it was revised twice. Over the last few weeks, both the departments have had a series of discussions to finalise the details.
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