As per the original provisions under the Special Economic Zones (SEZs) Act, 2005 and Rules, 2006, exemption from Minimum Alternate Tax (MAT) in the case of SEZ Developers and Units as also the exemption from Dividend Distribution Tax (DDT) for SEZ Developers were granted.

The provisions of Minimum Alternate Tax (MAT) have been made applicable to Special Economic Zone (SEZ) Developers and Units with effect from 1st April, 2012, and the exemption of Dividend Distribution Tax (DDT) in the case of SEZ Developers under the Income-tax Act for dividends declared, distributed or paid is not available after 1st June, 2011.

Ministry of Commerce and Industry (Department of Commerce) has recommended the restoration of original exemption from Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) to SEZ developers and units.

The information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

Exemption from MAT and DDT for SEZ developers and units proposed to be restored following government recommendation. Exemption from Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) for SEZ developers and units originally existed; later amendments removed MAT and DDT exemptions for those taxpayers, and the Department of Commerce has recommended restoring the original exemptions for SEZ developers and units.