18.5% MAT on SEZs to continue despite opposition

The minimum alternate tax (MAT) of 18.5% imposed on Special Economic Zones (SEZs) during last year’s Budget is all set to continue even this year, despite the pressure by IT body Nasscom, industry sources have said. The tax has brought down investments in SEZs to a trickle over the last one year, but the finance ministry is believed to be keen on continuing with the taxation to ensure an even sharing of corporate tax liabilities.In the last two months, Nasscom had been trying to convince the ministry about abolishing the MAT burden, but sources with direct knowledge of the matter told FE that the trade association has not been able to make any inroads on the matter. Both the developers as well as units in the tax-free zones were earlier exempted from MAT under Section 115 of the Income Tax Act.

Source: Financial Express