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Q.

Companies which set up production units in the Special Economic Zones (SEZs) do not have to pay taxes for an initial period of ____.


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Detailed Solution

Companies that set up production units in the Special Economic Zones (SEZs) do not have to pay taxes for five years.
Multinational corporations are big corporations that produce their goods in countries where skilled and unskilled labour can be readily available at a low wage. The MNCs set up their offices and production units in those countries where the government policies related to production and trade are favourable. To attract these MNCs, the Indian government created Special Economic Zones (SEZs), which provide cheap electricity and power facilities to attract MNCs.
 
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