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IT sector kept out of industrial parks
By siliconindia
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Tuesday, 12 February 2008, 17:01 IST
New Delhi: The government has said it will no longer permit new information technology (IT) units to be set up within industrial parks and imposed stringent norms for manufacturing units in such parks. The move is aimed at reducing tax exemptions ahead of Budget 2008-09. Industrial parks are entitled to income tax breaks till March 31, 2009, reported Business Standard.
The recently amended industrial park scheme 2008, notified on January 8, has raised doubts over 350 parks proposed by real estate developers like DLF, Ansal Properties and Singapore's Ascendas, among others.
Previous scheme mandated developers had to build infrastructure and lease it to companies that would then complete the development to meet their specific needs, while under the new scheme, the developer needs to provide a minimum built-up area of 50,000 square meters.
"Manufacturing companies build their factories around their machinery. If developers provide prospective manufacturing units with built-up area, there may not be any takers," said Ajit Krishnan, Partner, Ernst and Young.
The administrative control of the industrial park scheme has been transferred to the revenue department (Central Board of Direct Taxes) under the finance ministry from the department of industrial policy and promotion (DIPP) under the ministry of commerce and the revenue department.
Some observers feel the new changes will not impact manufacturing units that want to come up inside the parks. There are 273 industrial parks in the country, of which 43 withdrew their applications after the scheme became operational since 1997.
