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CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Special Economic Zones

Mahati Zone Ltd operates a zone that was functioning as a Central Government export processing zone before the SEZ Act, 2005 commenced. Which statement correctly describes how the Act treats it?

The Act applies to an existing SEZ, as far as may be, in all its provisions except sections 3 and 4. So the zone need not seek fresh approval or notification, but the rest of the Act governs it.

  1. AIt must apply afresh for notification under section 3 and 4 before the Act applies to it
  2. BThe provisions of the Act, except sections 3 and 4, apply to it as far as may beCorrect
  3. CNone of the provisions of the Act apply to it until it is converted into a new zone
  4. DOnly the provisions on customs apply to it and the rest of the Act is excluded

Explanation

Section 44 provides that all provisions of the Act except sections 3 and 4 apply, as far as may be, to every existing Special Economic Zone. Hence it need not go through fresh approval and notification. The option requiring fresh application is wrong because sections 3 and 4 are exactly the ones excluded.

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