Economic Development

Choose the Correct Answer

Correct Answer : Option c

Explanation
Context: Recently, the Ministry of Commerce and Industry has notified Special Economic Zones (SEZ) (Fifth Amendment) Rules, 2023 in the exercise of powers conferred by Section 55 of the SEZ Act, 2005.

Statement 1 is incorrect:The SEZs (Fifth Amendment) Rules, 2023 have introduced changes to the SEZ Rules of 2006. Under these revised rules, a part of the built-up space within an IT or ITES Special Economic Zone can now be designated as a non-processing area, provided certain conditions are met—such as the repayment of any tax benefits previously claimed for that specific area. . A non-processing area constitutes a complete floor, and partial demarcation of a floor is not permitted. The processing area in an SEZ is for the manufacture of goods or rendering of services. The non-processing area is for supporting infrastructure.

Statement 2 is incorrect: Businesses involved in IT or ITES within a non-processing zone of a Special Economic Zone are ineligible to access the rights or amenities provided to Special Economic Zone Units.. Tax benefits are not applicable to the operation and maintenance of common infrastructure and facilities within an Information Technology or Information Technology Enabled Services Special Economic Zone.

Statement 3 is correct: Demarcation of a non-processing area is prohibited if it leads to a reduction in the processing area to below 50% of the total area or falls below the value specified.

Statement 4 is correct: The amendment aims to enhances ease of doing business within SEZs. It safeguards the rights of both SEZ developers and occupants. Vacant space can be used more efficiently by a wider range of businesses.