The government said on Tuesday that it has cleared 3 new SEZ proposals including one of Videocon.

Interestingly, the clearing comes post an announcement where the government is said to considering the removal of tax sops given to new SEZs. This has dampened the attractiveness of SEZs since tax benefits were the main reason why companies used to flock in fore SEZ space.

As per the draft Direct Tax Code of the Finance Ministry proposal, income tax should be eliminated from the eliminations given to export income situated within an SEZ.

While no development has happened in this regard, the Board of Approval (BoA) in the Commerce Ministry gave nod to three approvals and also gave extension to 24 developers including GMR, Unitech Kochi SEZ Ltd and K Raheja Corporation.

Besides this, BoA has also deferred a decision on making guidelines for giving waiver in clauses of rules. This is that SEZ should be set up in a single piece of land considering the environment issues related to it.

SEZs which came up as an attractive investment destination in 2006 have lost their charm now. The matter was aggravated with the slowdown.