SEZ tax sops will cause $20 bn revenue loss

A slew of tax exemptions planned for special economic zones to boost exports will erode Rs 93,900 crore ($20.62 billion) in government revenues over the next four years, a finance ministry official said on Friday.

‘‘The revenue loss on account of direct taxes is estimated to be Rs 53,740 crore, and on account of indirect taxes it is estimated to be Rs 40,164 crore,’’ junior finance minister S.S. Palanimanickam told Parliament in a written reply on Friday.

The Special Economic Zones Act 2005 was approved last year paving the way for setting up of such zones to boost exports and help India catch up with its Asian rival China.

The government has lined up a string of exemptions on direct and indirect taxes to step up the creation of special economic zones.