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CMA Final · Indirect Tax Laws and Practice · Special Economic Zone Scheme

Under Section 49 of the SEZ Act, 2005, the Central Government may by notification direct that Central Acts shall not apply to SEZs or shall apply with modifications. Which matters are excluded from this power of modification?

The power to modify or disapply laws for SEZs does not cover labour-related matters such as trade unions, industrial and labour disputes, welfare of labour, provident funds, employers' liability, workmen's compensation, pensions and maternity benefits. Fiscal matters like customs can be modified by notification.

  1. ACustoms duty and excise matters
  2. BTrade unions, industrial and labour disputes, welfare of labour, provident funds and similar labour mattersCorrect
  3. CIncome-tax exemptions for units
  4. DForeign exchange and export obligations

Explanation

The proviso to Section 49(1) says the power does not extend to modifications relating to trade unions, industrial and labour disputes, welfare of labour including conditions of work, provident funds, employers' liability, workmen's compensation, pensions and maternity benefits. Fiscal and trade laws can be modified.

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