The developers of special economic zones may not get tax benefits for the money spent on meeting the contiguity norms.
As a result, many multi-product SEZs which do not have contiguous land may face cost escalation. These include two zones being developed by Reliance Industries Ltd.
"The tax benefits will not be available when the SEZ developers build roads and underpasses to meet the contiguity norms. The Board of Approval has been given the powers to decide on imposing or relaxing the conditions related to contiguity on a case-to-case basis," said a commerce ministry official. This clause would apply to all existing and proposed SEZs.
The SEZ rules were revised in March to give the inter-ministerial board the powers to allow zones which did not have contiguous land. However, the board will give the go-ahead only if the developer builds adequate overbridges and underpasses to connect the divided plots.
In April, the board had approved the expansion of Reliance Jamnagar Infrastructure Ltd's petro-chemical SEZ spread over 733 hectares to include another 492 hectares.
The expansion was being hampered
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