According to India’s Policy on SEZs consider the following statements:
Which of the above statement(s) is/ are correct?
According to India’s Policy on SEZs consider the following statements:
Which of the above statement(s) is/ are correct?
The correct option is C 2, 3 and 4 only
Extra Information:
India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000.
The main objectives of the SEZ Act are:
- generation of additional economic activity
- promotion of exports of goods and services;
- promotion of investment from domestic and foreign sources;
- creation of employment opportunities;
- development of infrastructure facilities;
India’s Policy on SEZs
Keeping in view the above, a competitive package for SEZ developers and units has been put in place. The major components of this package include:
- Duty-free import/domestic procurement of goods for development, operation, and maintenance of SEZs and SEZ units.
- Extension of income tax benefits under Section 80 IA of the Income Tax (IT) Act to SEZ developers for a block of 10 years in 15 years, as per the choice of the developers.
- 100% income tax exemption for SEZ units under Section 10A of the IT Act for the first 5 years, 50% for 2 years thereafter, and 50% of the ploughed back export profit for the next 3 years.
- 100% income tax exemption for 3 consecutive years and 50% for the next 2 years to off-shore banking units set up in Special Economic Zones.
- External commercial borrowing by SEZ units without any maturity restrictions through recognized banking channels.
- Treating supplies from the Domestic Tariff Area (DTA) to SEZ at par with physical exports.
- Exemption from Central Sales Tax on sales made from the DTA to SEZs.
- Exemption from Service Tax for SEZ units and developers.
- Exemption from State taxes and levies, as notified by various State Governments.
At presant, all the eight EPZs located at Kandla and Surat (Gujarat), Santa Cruz (Maharastra), Cochin (Kerela), Madras (Tamil Nadu), Noida (UP), Falta (West Bengal), and Vishakapatnam (Andhra Pradesh) which have been converted into SEZs are functional. In addition, 7 new SEZs have become operational in 2004/2005 which are given as under:
Administrative set up for SEZs:
The functioning of the SEZs is governed by a three tier administrative set up – (i) the Board of Approval is the apex body in the Department, (ii) the Unit Approval Committee at the Zonal level dealing with approval of units in the SEZs and other related issues, and (iii) each Zone is headed by a Development Commissioner, who is also heading the Unit Approval Committee.
2, 3 and 4 only
Extra Information:
India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000.
The main objectives of the SEZ Act are:
- generation of additional economic activity
- promotion of exports of goods and services;
- promotion of investment from domestic and foreign sources;
- creation of employment opportunities;
- development of infrastructure facilities;
India’s Policy on SEZs
Keeping in view the above, a competitive package for SEZ developers and units has been put in place. The major components of this package include:
- Duty-free import/domestic procurement of goods for development, operation, and maintenance of SEZs and SEZ units.
- Extension of income tax benefits under Section 80 IA of the Income Tax (IT) Act to SEZ developers for a block of 10 years in 15 years, as per the choice of the developers.
- 100% income tax exemption for SEZ units under Section 10A of the IT Act for the first 5 years, 50% for 2 years thereafter, and 50% of the ploughed back export profit for the next 3 years.
- 100% income tax exemption for 3 consecutive years and 50% for the next 2 years to off-shore banking units set up in Special Economic Zones.
- External commercial borrowing by SEZ units without any maturity restrictions through recognized banking channels.
- Treating supplies from the Domestic Tariff Area (DTA) to SEZ at par with physical exports.
- Exemption from Central Sales Tax on sales made from the DTA to SEZs.
- Exemption from Service Tax for SEZ units and developers.
- Exemption from State taxes and levies, as notified by various State Governments.
At presant, all the eight EPZs located at Kandla and Surat (Gujarat), Santa Cruz (Maharastra), Cochin (Kerela), Madras (Tamil Nadu), Noida (UP), Falta (West Bengal), and Vishakapatnam (Andhra Pradesh) which have been converted into SEZs are functional. In addition, 7 new SEZs have become operational in 2004/2005 which are given as under:
Administrative set up for SEZs:
The functioning of the SEZs is governed by a three tier administrative set up – (i) the Board of Approval is the apex body in the Department, (ii) the Unit Approval Committee at the Zonal level dealing with approval of units in the SEZs and other related issues, and (iii) each Zone is headed by a Development Commissioner, who is also heading the Unit Approval Committee.
