Skip to content

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

Under the Special Economic Zones Act, 2005, once the Board suspends a Developer's letter of approval and a transferee is selected, what is the position regarding the Developer's rights, duties, obligations and liabilities from the date of suspension or earlier transfer?

All the Developer's rights, duties, obligations and liabilities cease absolutely from the date of suspension, or the earlier date of transfer to the transferee, but liabilities that accrued before that date are preserved and remain enforceable against the Developer.

  1. AAll of them cease absolutely, including liabilities accrued before that date
  2. BThey cease absolutely, except for any liabilities which accrued before that dateCorrect
  3. CThey continue unchanged until the Administrator is divested of management
  4. DOnly the rights cease, while duties and liabilities continue for the transferee to discharge

Explanation

The Act provides that all rights, duties, obligations and liabilities of the Developer cease absolutely from the date of suspension, or from the earlier date of transfer to the transferee, except liabilities that accrued before that date. The first option wrongly extinguishes accrued liabilities, and the others misstate the rule.

Did you get it right without looking?

One question tells you little. A timed set on Special Economic Zone Scheme shows your real accuracy, how long you take and where you lose marks.

Practise Special Economic Zone SchemeFree diagnostic mock

More Special Economic Zone Scheme questions