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

Under the Special Economic Zones Act, 2005, the Board suspends the letter of approval of a Developer who has persistently defaulted in complying with its directions. For what maximum period can the letter of approval be suspended and an Administrator appointed under this power?

The Board can suspend a Developer's letter of approval for a period not exceeding one year and appoint an Administrator to run the zone. The Act sets one year as the ceiling, so shorter or longer periods such as six months or two years are not the statutory limit.

  1. ANot exceeding six months
  2. BNot exceeding one yearCorrect
  3. CNot exceeding two years
  4. DNot exceeding three years

Explanation

Section 10(1) permits suspension of the letter of approval for a period not exceeding one year, with an Administrator appointed to discharge the Developer's functions. Six months, two years and three years are not the limit stated in the section.

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