Dr Reddy’s raises concern over sunset clause for SEZs
Dr Reddy\'s Laboratories Ltd on Wednesday said the central government’s move to introduce sunset clause for Special Economic Zones (SEZs) from March 2017 would be ‘at odds’ with the Make in India initiative and sought deferment of its implementation by a few more years.
Seeks deferment of its implementation scheduled from March 2017
Hyderabad: Dr Reddy's Laboratories Ltd on Wednesday said the central government’s move to introduce sunset clause for Special Economic Zones (SEZs) from March 2017 would be ‘at odds’ with the Make in India initiative and sought deferment of its implementation by a few more years. However, the pharma major welcomed the government’s initiative to simplify the taxation laws.
"The introduction of a sunset clause for SEZs from March 31, 2017, seems to be at odds with Make in India objective. This could be deferred by a few more years, considering the significant investments by the companies, as also the impact SEZs encountered due to the MAT (minimum alternate tax) levy," said Saumen Chakraborty, President and CFO, Dr Reddy’s.
He further said that the Central Board of Direct Taxation (CBDT) announcement relating to tax reduction from 30 per cent to 25 per cent over next four years, coupled with phasing out the investment-linked and profit-linked deductions, was a step in right direction. “At the same time, the government should also consider a reduction of MAT in a phased manner as well," he added.
According to him, the withdrawal of R&D weighted deduction is potentially counter-productive and likely to negatively impact India's innovation efforts. Countries across the world have been introducing various measures for promoting R&D initiatives in the form of credit, weighted deduction and patent box.
"The R&D weighted deduction must continue, to provide India a level-playing field in an increasingly competitive global innovation environment," he said.
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