The Mumbai-based developer has approached the Board of Approval (BoA) regarding this, which will decide on the matter on June 17. This is the second realtor after DLF Ltd, which too sought cancellation of notified SEZs. Notification is the final clearance for a SEZ, after which it starts enjoying the direct and indirect tax benefits prescribed under the SEZ Act.

K Raheja has asked for denotification of its 13 hectares IT zone based in Navi Mumbai. In addition, the company also wants to surrender about half of the 20.65 hectares of another infotech SEZ in the same area. These are the only two notified SEZs for the Mumbai-based realtor.

When contacted, K Raheja officials declined to comment.

While asking the BoA to denotify the zones, the company has blamed the lack of demand for space for IT-related zones. It also said that prospective clients have halted their expansion plans indefinitely due to the ongoing economic slowdown. Both the zones were notified in mid-2007.

The company has told the BoA that both the plots are vacant, and no construction activity has taken place. Thus, no duty or tax benefits were availed by the company.

The BoA has taken up de-notification requests of five zones till now, all belonging to DLF. While one of the Delhi-based zones has been de-notified, the BoA has given in-principle approval to scrap four other notified zones, under the condition that DLF will have to pay back all the duty benefits it availed from the government.

All these notified SEZs, which the developers have surrendered, belong to the infotech sector.

Though there are no provisions related to de-notification in the SEZ Act, the law ministry has told the commerce ministry that since the board has power to notify zones, it also can also scrap it, if developers want to exit the zones.

DLF seeks permission for building commercial space

Even as DLF got conditional approval for scrapping four infotech zones, it has asked the BoA under the commerce ministry to build 2,28,000 sq feet of commercial space, service apartments and housing for employees in four SEZs at Gurgaon, Hyderabad and Chennai, which the company is developing. All this construction activity has been proposed in the non-processing area of the zones, where supporting infrastructure for units in the processing area is built.