Question

Q. With reference to the Special Economic Zones (SEZs) and National Investment Manufacturing Zones (NIMZ), consider the following statements:

Which of the above statements is/are correct?

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. Neither 1 nor 2

Answer 1

The correct option is D Neither 1 nor 2

Explanation:

Under the SEZ Act of 2005, an SEZ is a specifically delineated duty-free enclave. It is deemed to be foreign territory for purposes of trade operations and duties and tariffs.
Whereas, the National Manufacturing Policy envisages NIMZs as integrated industrial townships with state of the art infrastructure to be declared by the State Government under Article 243Q(1) of the Constitution.

Statement 1 is incorrect: While Special Economic Zones are notified under the Special Economic Zones Act of 2005, the National Investment Manufacturing Zones are notified under the National Manufacturing Policy of 2011.

Statement 2 is incorrect: For all the SEZ firms, the income tax is exempted 100% for the first 5 years, 50% for the next five years. For NIMZ firms, the income tax is exempted for only small and medium enterprises.