 policy in India first came into inception on April 1, 2000. The prime objective was to enhance foreign investment and){kind=link}
Special Economic Zone policy in India first came into inception on April 1, 2000. The prime objective was to enhance foreign investment and provide an internationally competitive and hassle free environment for exports.
As a major step forward meant to instill confidence in investors and signal the government’s commitment to a stable Special Economic Zone (SEZ) policy regime, a comprehensive Special Economic Zone Act, 2005 was passed by the parliament in May 2005. It received the Presidential award on the 23rd of June 2005. This Act came into force w.e.f. February 10, 2006.
The salient features of Special Economic Zones Act are:
- Exemptions from customs duty, excise duty etc. on import/ domestic procurement of goods for the development, operation and maintenance of Special Economic Zone (SEZs) and the units therein.
- 100% income tax exemption for 5 years, 50% for next five years and 50% of ploughed back export profits for 5 years thereafter for Special Economic Zone SEZ’s unit.
- Exemption from capital gains on transfer of an undertaking from an urban area to SEZs.
- 100% income tax exemption to Special Economic Zone (SEZ) developers for a block of 10 years in 15 years.
- Exemption from dividend distribution tax to SEZ developers.
- 100% income tax exemption for 5 years and 50% for next 5 years for offshore banking unit located in SEZ.
- Exemption to SEZ developers and units from Minimum Alternate Tax.
- CST exemption to SEZ developers and units on the inter-state purchase of goods.
- Constitution of an authority for each SEZ with a view to providing greater administration financial and functional autonomy to these zones.
- Establishment of designated courts and a state enforcement agency to ensure speedy trial and investigation of offences committed in SEZs.
- Encouragement to State Government to liberalise State laws and delegate their power to the Development Commissioners to the SEZs to facilitate single window clearance.
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