Shri Kamal Nath, Minister for Commerce and Industry, has stated that the EOU/SEZ Sector is playing a very important role in encouraging manufacturing activity, providing substantial employment opportunities, thereby accelerating the pace of economic growth. The units set up under these schemes are already providing direct employment to over 6.5 lakh people. He was speaking at the Export Awards function, organised by the Export Promotion Council for EOUs and SEZ Units (EPCES), here last evening. Shri R. Gopalan, Additional Secretary, Department of Commerce; Shri R.S. Gujral, Director General of Foreign Trade (DGFT); Shri T. Vasu, Chairman, EPCES and Shri L.B. Singhal, Director General of EPCES, apart from Development Commissioners of various EPZs and SEZs were present on the occasion.

As regards Sunset Clause, the Minister said: "I am aware of the need of the removal of the Sunset Clause under Section 10B of the Income Tax Act, so that EOUs continue to avail the exemption from income tax, especially at this juncture when all the exporters have been hit badly on account of rupee appreciation. I have taken up the issue with Prime Minister as well as Finance Minister".

The Minister observed that SEZ units and developers are facing certain problems in the context of Service Tax, benefit of DEPB/Duty Drawback on supplies to SEZ Developers, interpretation of Section 10AA of the Income Tax Act etc. "We are working on these issues and hopefully will be able to resolve these suitably. There are certain issues related to State Governments as well like implementation of Single Window Mechanism, Exemption from Stamp Duty etc. I have asked Commerce Secretary to take a meeting with various State Governments this month for an early resolution of these issues", he added.

Shri Kamal Nath stated that the exports from SEZs in the year 2006-07 was Rs.34,787 crore, which was 52% higher than the previous year's exports. "This year, I am expecting a growth of 100% and the exports from SEZs are likely to touch Rs.67,000 crore. Exports from SEZs is like to cross Rs.1,00,000 crore in the year 2008-09. At present, over 42 SEZs have already started operations and many more new SEZs are in the advance stage of operation. Many of these SEZs are recruiting people from rural areas and providing them training for operations in the SEZs, as we have seen from Gem & Jewellery SEZ in Hyderabad, Textiles units in Mahindra SEZ in Chennai and other new SEZs like Nokia, Flextronics in Chennai, Apache SEZ, Brandix Apparel SEZ, Divy's Laboratories in Andhra Pradesh and Rajiv Gandhi Technology Park in Chandigarh", he said.

While congratulating the award winners, the Minister said that "I am sure, all of you will strive towards achieving the full export potential of your establishments, thereby contributing to the country's economy as well as creation of further employment".

Speaking on the occasion, Shri Vasu, Chairman, EPCES, informed that EOUs and SEZs encourage manufacturing, exports, and employment generation and accelerate the process of inclusive growth. He further added that EOUs and SEZs provide direct employment to over 6.5 lakh people and indirect employment nearly 5 times. Most of the employment is generated in rural and semi-rural areas. EOUs are operating in 27 states and new SEZs have been approved in 22 states. 420 SEZs have already started operations and have already started exporting.

The total number of awards presented were 47 and are in the fields of gem & jewellery, engineering, plastic products, electronic, computer hardware, services, readymade garments, handicrafts, chemical & allied products, textile products, food products etc.

Sunset clause removal urged to preserve income tax exemption for EOUs amid service tax and duty-drawback concerns. Key regulatory priorities for the EOU/SEZ sector include removal of the sunset clause to secure income tax exemption, resolution of service tax treatment, assurance of DEPB/duty-drawback benefits for supplies to SEZ developers, clarification of tax-exemption provisions for SEZ units, and addressing state-level impediments such as Single Window implementation and stamp duty exemptions.