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115jb vs sec.80ic

CA Mitesh Shah (Chartered Accountant) (68 Points)

05 November 2012

Facts :- A company operating in SEZ area, eligible for deduction of 100% of its profit u/s 80IC. Question : Is it liable to pay MAT? Given as per clause F of explanation 1 which exempt SEZ unit u/s 10AA to pay MAT. Please clarify with some reference to any case law, or cicular or notice.

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2 Replies

Shivashish (Chartered Accountant) (2796 Points)
Replied 06 November 2012

Yes MAT shall be payable as the section specifically provide for exemption u/s 10AA. MAT provisions shall be read as it is.

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CA Mitesh Shah (Chartered Accountant) (68 Points)
Replied 09 November 2012

If that is the case, my next confusion is that why the big companies, able to employe huge talented professionals, are not claiming exemption profit of their units situated in SEZ area u/s 10AA rather claiming deduction u/s 80IC. As the MAT credit they will be able to utilize after holiday period gets over. Now up to that period huge fund gets blocked in the form of MAT credit. Loss of interest on this non creative fund. Sometimes loss of some business opportunity.