Following the tug-of-war between local bodies and entrepreneurs of Special Economic Zone (SEZ) regarding payment of taxes and cess, the government on Friday issued a notification exempting these companies from taxes.
Local self-government Principal Secretary T K Manoj Kumar issued the notification under Section 281 of the Kerala Municipality Act, 1994 provided that the local bodies shall not be obliged to provide civic amenities to such zones. Earlier, those institutions under the panchayat were exempted and now it had been extended to the areas under Kerala Municipality Act 1994.
The issue had cropped up when the Thiruvananthapuram City Corporation limit was extended to Kazhakoottam, where the Techopark is situated. Though the Technopark was granted the SEZ status, the Corporation demanded taxes from the companies operating there.
The City Corporation has issued notice to the companies for paying property tax as per the Kerala Municipal Act. They had even decided to issue closure notice and initiate recovery proceedings against the companies.
The companies approached the government seeking a roll-back of the taxes imposed on them. As per the Local Self-Government Department notification issued in 2004, the government had exempted SEZs from paying property tax as empowered under the Panchayat Raj Act and now it has been extended under Kerala Municipal Act too.
Earlier, it was argued that the notification was applicable only to the SEZs in panchayats and not to the ones set up in the Corporation area and this led to the dispute. As most of the IT companies in Kerala are located in panchayat areas, the tax was exempted and now the issue had cropped up when they came under the Corporation or Municipal limits.
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