TAX HOLIDAY ENDS ON EXPIRY DATE

The Government has rejected a proposal to extend the tax holiday available to EOUs, STPs and EHTPs beyond 2009- 10. In relation to exemption provisions as contained under Income Tax Act 1961, it has been clarified by the Government that:

• Tax holiday under section 10A and 10B till 2009- 2010 applicable to EOUs, STPs, EHTPs will not to be extended.
• Proposal to exempt EOUs from service tax and central sales tax has been rejected.
• Commerce Ministry reimburses CST to EOUs and upcoming scheme for refund of service tax on exports citied as reason for rejection.
• Decisions may stall expansion plans of EOUs.
• Future projects eye SEZs.