There is no concept of foregoing indirect taxes. Even if the unit is situated outside SEZ, Indirect Taxes are already exempted. In SEZ the process is made easier. For eg. No Central Excise, Customs or Sales Tax charged for goods used for producing exports. This is only a misnomer. Currently even EOU's are enjoying the same. If we compare the paperwork for units claiming drawback etc. the cost of transaction is easier. For example units not in EOU or SEZ has to either have advance licence [DFIA] or file draw back etc. Lots of Govt. and private manpower is wasted without any gain. To gain one rupee of drawback, Govt. wastes nearly 10 paise[i.e]110 paise and private sector another 10 paise. What is the gain? Only catch is the income tax. This is not exempted for other exports leading to differential taxes. Vatable duties like excise, sales are not paid by any industry. Rather the final consumer bears it as he cannot pass on duty. Finally, there is no loss in indirect taxes due to SEZ as already the same is enjoyed by other exporting units. Only the direct taxes is the differential duty. This will clarify all
