In India, the SEZs Rules, 2006 came into effect in ______.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2: February 2006.
Explanation:
- In India, the Special Economic Zones (SEZs) Act, 2005, received Presidential assent in June 2005; however, the associated SEZ Rules officially came into effect on February 10, 2006.
- Objective: The primary objective of the SEZ policy is to generate additional economic activity, promote the export of goods and services, attract investment (both domestic and foreign), and create employment opportunities.
- Special Status: An SEZ is a designated area that is treated as foreign territory in terms of trade operations and tariffs. Export-oriented units located within these zones are provided with significant tax exemptions and simplified business regulations.
Key Facts about SEZs:
- Nodal Ministry: Ministry of Commerce and Industry.
- First SEZ: India's (and Asia's) first 'Export Processing Zone' (EPZ) was established in 1965 in Kandla (Gujarat). Subsequently, under the policy introduced in 2000, EPZs were converted into SEZs.
- Baba Kalyani Committee: In 2018, the Government of India constituted a committee chaired by Baba Kalyani to review the SEZ policy.
- Additional Benefits (Incentives):
- Tax Exemption: SEZ units are entitled to a 100% income tax exemption on export earnings (for the first 5 years) under Section 10AA of the Income Tax Act.
- Customs Duty: No customs duty is levied on the import of raw materials and capital goods.
- Single Window Clearance: A simplified and integrated process for obtaining approvals and licenses.
Potential Questions for Upcoming Exams:
Question: Where was Asia's first Export Processing Zone (EPZ) established?
Answer: Kandla (Gujarat), 1965.
Question: In which year was the SEZ Act passed? Answer: 2005 (Implemented in 2006).
Question: Which committee was constituted to review the SEZ policy?
Answer: Baba Kalyani Committee.