Search Results For: 10AA

DATE: August 22, 2019 (Date of pronouncement)
DATE: September 14, 2019 (Date of publication)
AY: 2012-13
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S. 10AA/ 115JB: Even income arising from the business of a SEZ Unit, which is exempt u/s 10AA, is subject to MAT from AY 2012-13 onwards owing to the insertion of the proviso to s. 115JB(6). The earlier judgements holding that the exemption provisions would prevail over s. 115JB are not good law after the insertion of the proviso to s. 115JB(6) (CBDT Circular No. 2/2012 dated 22.5.2012 referred)

It is thus seen that the Special Economic Zones Act, 2005 had initially inserted sub-section (6) in section 115JB of the Act to provide that the provisions of section 115JB shall not apply to income accrued or arising on or after 1-4-2005 from any business carried on, or services rendered, by an entrepreneur in a unit of SEZ or a developer of SEZ. Thus, a company carrying on the specified business in a unit in SEZ or as a developer of SEZ was not liable to pay MAT on the profits derived from the said business. However, the Finance Act, 2011 brought-in a sunset clause and inserts a proviso to sub- section (6) to provide that, with effect from 1-4-2012, the provisions of sub- section shall cease to have effect. Accordingly, a SEZ developer or any entrepreneur carrying on business in an SEZ unit (being a company) would be liable to pay MAT on the profits arising from the development of SEZ or the business carried on in an SEZ unit with assessment year 2012-13 and onwards