Which financial incentive is specifically extended to developers of Special Economic Zones (SEZs) in India to facilitate infrastructure creation?
Show answer & explanation
Correct answer: D
Explanation
Correct Answer: Capital grant from central government
Explanation:
To support the high capital expenditure required for developing world-class infrastructure in Special Economic Zones (SEZs) across India, the central government offers capital grants and financial assistance through targeted infrastructure development schemes to eligible developers. These grants facilitate the creation of essential common infrastructure such as internal roads, power distribution networks, water supply, and waste management facilities.
Key Points:
- SEZ developers are also entitled to other benefits, including duty-free import or domestic procurement of goods for development and a 10-year Income Tax exemption under Section 80-IAB of the Income Tax Act.
- Tax refunds or exemptions on exports are typically structured for individual SEZ units operating within the zone rather than the master infrastructure developers.
- Land acquisition is primarily governed by state policies rather than standard central subsidies.
Important Questions and Answers:
Question: Under which section of the Income Tax Act are SEZ developers eligible for a 10-year tax exemption?
Answer: Section 80-IAB
Question: What is the primary purpose of capital grants provided to SEZ developers?
Answer: To facilitate the creation of essential common infrastructure like roads, power, and water supply.