New Delhi, 27 Dec (KNN) As reported in FE, the government is working on a decision for special economic zones (SEZs) to include freedom to sell goods in the domestic market at low duties, easier exit for loss-making units and relaxation of extant norms.

It is expected that some parts of the proposals feature in the Budget for 2022-23.

This will be marked under the “SEZ-plus” initiative wherein the government may allow such units to sell goods in the domestic market.

The units could be subject to a lower impost than the regular customs duties that they are currently mandated to pay while supplying to the domestic tariff area (DTA). However, this levy is expected to neutralise the advantages that SEZs, being specifically delineated duty-free enclaves, enjoy vis-à-vis domestic manufacturers to ensure a level-playing field for firms operating outside such zones, as published in FE.

The plan, which requires the concurrence of the finance ministry, is aimed at helping Covid-hit SEZs to better utilise their idle capacities and improve sales.

The commerce ministry is also working out a mechanism to enable partial de-recognition of existing SEZs so that areas that are no more in demand can be used for other purposes, and a space transfer policy for SEZs is also in the pipeline.

SEZs sold manufactured goods worth INR 50,033 crore in the domestic market last fiscal, down from INR 53,831 crore in FY20. Their domestic sales would soar substantially if the tax incidence drops, industry executives have said.