Rahul Mehta Gandhinagar LsCandidate
How tax exemptions in SEZ benefits videshi company more than desi companies
Congress\BJP\AAP have all pledged that they will continue tax benefits to SEZ companies. Let me explain how that benefits videshi far far more than desi. We are right to recall are now
Consider business of short export. Consider 10000 small manufacturers each having capacity of 10000 shirts a year on an average totaling 10 crore shirts per year. Now they may be exporting say 2 crore shirts a year.
Now consider one large videshi company which can also make 2 crore shorts a year in India and export the same.
Now the small desi companies dont have any marketing network in west. So even if they can export, they cannot give commitment of 100% export upfront !!! Whereas the videshi company can give commitment of 100% export upfront. So videshi comoany can setup SEZ, while these small players cant,
Now even if small players export, they will have to pay all taxes while company in sez wont have to pay tax. In addition to taxes, PF rules and labor laws will also apply on non-sez companies, while companies in sez will have no PF rules and they can hire-fire anytime !!! So due to tax differences, the desi company will simply lose all export business,
IOW, sez law favors companies which have sales and marketing network in USA, Europe etc. So it will mostly favor foreign companies and put Indian companies at a disadvantage.
Congress\BJ{\AAP support sez law-drafts. Bharat Swabhiman Trust workers insist on spending all time in slogan shouting and not waste time in opposing SEZ-law-draft !!! We at Right to Recall group are only people opposing tax breaks to sez comoanies !!!
In SEZ, Indians were able to establish software\IT companies . So now IT\software companies in sez are taxed at 20% !!! But most hardware, electronic , garment etc companies ra e wholly or partly videshi owned.And so they continue to get tax benefits,
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In addition Congress\BJP\AAP also support Mauritus route which means if a foreign comoany opens an office in Mauritius, even if that office is just one room with one clerk who recieves posts, then that company will not be taxed on its profits etc. I asked many BST-workers to oppose Mauritius route, But here too, they want to confine to slogan shouting only.