With reference to Special Economic Zone (SEZ), consider the following statements

1. SEZs have full freedom for subcontracting.
2. They are exempted from routine examination by custom authorities.
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

Ans- [C]

Explanation- SEZ is a specifically delineated duty-free enclave deemed to be foreign territory for the purposes of trade operations and duties and tariffs. They first came into inception on April 1, 2000. The prime objective was to enhance foreign investment and provide an internationally competitive and hassle free environment for exports. The idea was to promote exports from the country. SEZ has following featuers:

1. No license required for import.
2. Manufacturing, trading or service activities allowed.
3. SEZ units to be positive net foreign exchange earner within three years.
4. Domestic sales subject to full customs duty and import policy in force.
5. Full freedom for subcontracting.
6. Duty-free goods to be utilized over the approval period of 5 years.
7. No routine examination by customs authorities of export/import cargo.