Satyam in time plea for SEZs

Mahindra Satyam has sought more time from the authorities to set up its three special economic zones (SEZs) in Andhra Pradesh.

“We have decided to go slow on infrastructure and expansion because of global economic recession in IT, in particular. The company is in the process of analysing the worldwide economic situation to amend the expansion plans appropriately,” Mahindra Satyam said.

The board of approval for special economic zones, headed by commerce secretary Rahul Khullar, will take up the matter on February 11.

Satyam Computer Services, now called Mahindra Satyam, plans to develop three SEZs — at Hitec City and Bahadurpally (both in Hyderabad) and Thotlakonda (near Visakhapatnam) — in Andhra Pradesh.

The three proposed tax-free zones have already been given an extension, which would lapse in June.

The company said it had completed the first phase of the 12-hectare SEZ at Hitec City, with a built-up area of 2,41,064 square feet.

“We spent Rs 78 crore on this. Work for the second phase is in progress and is likely to be completed by September. We expect exports to commence by the end of next fiscal,” the company informed the board of approval.

The zones that get in-principle approval have to complete land acquisition within a year of approval, while a formally approved SEZ with land under possession has to make the tax-free enclave operational within three years.

Officials said the new management of the company, which is reviewing Satyam’s past activities, wanted to go slow on the SEZs as there was no demand for space.

The SEZ Act of 2005, which became effective from February 10, 2006, gave units within the zone and their developers certain tax benefits.

Under the act, developers are entitled to 100 per cent tax exemption on profits for 10 years on the trot during the first 15 years of operations.

Units are entitled to a 100 per cent tax exemption on export profits during the first five years of operations and 50 per cent exemption for the next five years.

From the 11th to the 15th year, the units are eligible for a 50 per cent waiver on reinvested profits.

So far, extensions have been granted to 105 developers. More than Rs 1 lakh crore has been invested in around 100 SEZs.

The BoA has so far notified 335 SEZs, while 147 have got in-principle approvals.