Will Minimum Alternate Tax stay on SEZs?

Commerce secretary has said the government is looking at a package to revive SEZs and on the issue of MAT. However, Revenue secretary said tax sops are unlikely as fiscal space is limited. Both ministries are negotiating a solution to the issue.

The industry players were hoping for a tax cut in the SEZs and scrapping of minimum alternate tax (MAT) in the Union Budget, but Finance Minister Arun Jaitely refrained from saying anything specific on the issue.

However, commerce secretary Rajeev Kher at a CII event on July 15 said the government is looking at a package to revive Special Economic Zones (SEZs). He also added that the issue of MAT on SEZs is up for review.

Speaking at the same event, revenue secretary Shaktikanta Das said tax sops are unlikely as the fiscal space is limited. Both the finance and the commerce ministries are still negotiating a solution to this issue.

In an interview to CNBC-TV18, Arun Nanda, Chairman, Mahindra Lifespace , said SEZs were meant to incentivise setting up factories, were built to strengthen India's export market. He said he is disappointed with no MAT exemption in Budget.

Nanda feels there should be no taxes on SEZs and is looking at tax benefits in the revival package. Special Economic Zones need strong support like logistics hubs and social infrastructure, he added.

DP Sengupta, Former Joint Secretary, CBDT, is against any exemption of taxes for doing business. He feels tax exemptions create an environment for litigations.

Mahindra Life stock price

On July 17, 2014, at 11:12 hrs Mahindra Lifespace Developers was quoting at Rs 556.00, up Rs 3.80, or 0.69 percent. The 52-week high of the share was Rs 603.00 and the 52-week low was Rs 327.20.

The company's trailing 12-month (TTM) EPS was at Rs 18.97 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 29.31. The latest book value of the company is Rs 277.53 per share. At current value, the price-to-book value of the company is 2.00.