Information technology and IT-enabled service units in special economic zones are going to be allowed the same tax concessions as given to developers of SEZs.
The government is to soon issue the new norms, as more and more IT companies don the function of a developer, empowering them to even sub-lease vacant spaces within their campuses.
According to the new norms, likely in August, IT companies would be entitled to the same tax benefits as SEZ developers, if they float a different entity to carry on the functions of the latter and build the specific zone according to their needs.
In addition, if a company wants to lease excess space from the zones to other units, it would be allowed to do so.
At present, units are not allowed to lease out any portion of their premises. So, IT companies would now play the role of a co-developer and, based on that, be entitled to the benefits the developer gets.
Both the entities, developer and units, would have to maintain separate accounts of all imports and domestic procurement of goods and services.
This had long been an issue between the revenue and commerce departments. The former wanted to know why such sops should be given.
"The issue has been solved now and a notification in this regard would be issued soon. The unit and co-developer are adequately ring-fenced so as to avoid double-dipping which could lead to a potential
loss of revenue," a senior government official from the commerce department told Business Standard.