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As per EXIM Policy 2000, Special Economic Zone (SEZ) is defined as "a specifically delineated, duty-free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs." These areas utilized for industrial, service and trade operations enjoy customs duty and tax exemptions and a liberal atmosphere for foreign investment and transactions. As of now, there are 143 special economic zones in India. With more than 500 formally approved by the government, the number of special economic zones would continue to rise in years to come. The primary objective behind the introduction of special economic zones is to encourage exports by providing a favorable atmosphere, which is internationally competitive and hassle free, for investors to make foreign direct investments. The special economic zones are made investment friendly by removing domestic regulations, restrictions and infrastructure inadequacies so that these export hubs become attractive destination points for investors. The entrepreneur setting up units in SEZ benefits from income tax exemption for 15 years. Besides that, the entrepreneur gets exemptions from customs and excise duties, central sales tax and local taxes, service tax, stamp duty and land registration charges so on and so forth. The taxes and levies that are normally imposed as part of several acts are relaxed in special economic zones. The following is a list of some of these acts. * The Agricultural Produce Cess Act, 1940 * The Mica Mines Labor Welfare Fund Act, 1946 * The Salt Cess Act, 1953 * The Jute Manufacturers Cess Act, 1983 * The Additional Duties of Excise (Goods of Special Importance) Act, 1957 * The Sugar (Regulation of Production) Act, 1961 * The Produce Cess Act, 1966 * The Sugar Cess Act, 1982 * The Agricultural and Processed Food Products Export Cess Act, 1985 * The Spices Cess Act, 1986 * The Research and Development Cess Act, 1986 In return, the units established in special economic zones for manufacturing goods, rendering services, trading and warehousing are expected to * Achieve positive Net Foreign Exchange earnings * Maintain proper and accurate accounting records * Submit annual performance reports to the Development Commissioner * Execute a bond cum legal undertaking with the Development Commissioner and Zone Customs * Comply with the environmental and pollution control rules For an entrepreneur planning to invest in special economic zones, these requirements are nothing when compared to the benefits that SEZ brings forth. Special Economic zones are definitely ‘the engines of new economic growth’ as it facilitates economic as well as industrial development. It brings about excellence and efficiency to all those who are part of this venture. Read Also On: Aerospace Testing, Engineering Services Company, Precision Machining
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