Correct Answer - Option 4 : Special Economic Zone
A special economic zone (SEZ) is a dedicated zone wherein businesses enjoy simpler taxes and easier legal compliances.
- SEZs are located within a country’s national borders. However, they are treated as foreign territory for tax purposes.
- This is why the supply from and to special economic zones have a little different treatment than the regular supplies.
- In simple words, even when SEZs are located in the same country, they are considered to be located in a foreign territory.
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SEZs are not considered a part of India.
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Based on this it can be clearly said that under GST, any supply to or by a Special Economic Zone developer or Special Economic Zone unit is considered to be an Interstate supply and Integrated Goods and Service Tax (IGST) will be applicable.
- A special economic zone (SEZ) is an area in a country that is subject to different economic regulations than other regions within the same country.
- The economic regulations of special economic zones (SEZs) tend to be conducive to—and attract—foreign direct investment (FDI).
- Special economic zones (SEZs) are typically created in order to facilitate rapid economic growth by leveraging tax incentives to attract foreign investment and spark technological advancement.
- While many countries have set up special economic zones (SEZs), China has been the most successful in using SEZs to attract foreign capital.
Hence, the correct answer is Special Economic Zone.
