Minimum Alternate Tax (MAT)

Commerce ministry to take up differential MAT on SEZs

  1. Context: Budget proposed a differential tax rate for the International Financial Services Centre (IFSC), Gujarat
  2. Govt. proposed a reduced MAT rate of 9% for the IFSC in an SEZ in Gujarat, while retaining 18.5% MAT on all other SEZ developers and units
  3. News: The Commerce Ministry will raise with its concern finance ministry after taking inputs from SEZ sector
  4. Reason: The export-oriented SEZ sector is witnessing a slowdown in terms of investment, exports and employment generation since FY12
  5. Criticism: In the FY12, govt. imposed a 18.5% MAT on SEZ developers and units as well as Dividend Distribution Tax on developers

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