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Consider the following statements with respect to Free Trade Warehousing Zones (FTWZs):
The Units operating in the FTWZs are allowed to import goods duty-free and re-export these goods without paying duty.
  • Units can be set up in the FTWZ by foreign companies with 100% FDI under the automatic route.
  • All transactions in an FTWZ are only in convertible foreign currency.
    Which of the statements given above are correct?
    • a)
      1 and 3 only
    • b)
      2 and 3 only
    • c)
      1, 2 and 3
    • d)
      None
    Correct answer is option 'C'. Can you explain this answer?
    Most Upvoted Answer
    Consider the following statements with respect to Free Trade Warehous...
    • Free Trade Warehousing Zones (FTWZs) are Deemed Foreign Territories / Ports / Warehouse for Storage and Other value-added activities under the Customs Law. FTWZ units are allowed to hold inventory on behalf of Foreign Suppliers/ Domestic Buyers.
    • FTWZ law allows multiple transfers of ownership transactions without removal of the goods out of FTWZ, thus ensuring the trading chain to be as close as possible and as may be required, ensuring that there is no cascade of indirect taxes/compliance and avoiding an increase in transaction cost.
    • Units operating in the FTWZ enjoy the following benefits:
      • They can import goods duty-free and warehouse them in the FTWZ; they can re-export these goods without paying duty. Hence statement 1 is correct.
      • They can also procure goods free of excise duties from the Indian market.
      • This facility is available for the goods the unit trades in, as well as for goods required for the development, operation and maintenance of the SEZ unit.
      • Units enjoy 100% Income Tax exemption on export income under Section 10AA of the Income Tax Act, 1961 for the first 5 years of operation, 50% for the next 5 years and 50% of the ploughed back export profit for the next 5 years.
      • SEZ units can also have external commercial borrowing up to the US $ 500 million in a year without any maturity restriction, through recognized banking channels.
    • FTWZ units are exempted from Central Sales Tax. They also enjoy exemption from Service Tax for all activities in the FTWZ (including labour, rentals, etc.).
    • Products from India entering the FTWZ are treated as deemed export providing immediate benefits to suppliers.
    • Indian companies exporting into FTWZ are able to count the exports against their export quotas.
    • FTWZ units also have single-window clearance for Central and State level approvals.
    • There is also an exemption from VAT for procurement from India.
    • The shared warehousing and equipment in the FTWZ reduce expenses.
    • The availability of onsite Customs means reduced time for Customs clearances.
    • The improved logistics and connectivity lead to reduced delivery times. Units can be set up in the FTWZ by foreign companies with 100% FDI under the automatic route. Hence statement 2 is correct.
    • All transactions in an FTWZ are only in convertible foreign currency. Hence statement 3 is correct.
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    Consider the following statements with respect to Free Trade Warehousing Zones (FTWZs): The Units operating in the FTWZs are allowed to import goods duty-free and re-export these goods without paying duty. Units can be set up in the FTWZ by foreign companies with 100% FDI under the automatic route. All transactions in an FTWZ are only in convertible foreign currency. Which of the statements given above are correct?a)1 and 3 onlyb)2 and 3 onlyc)1, 2 and 3d)NoneCorrect answer is option 'C'. Can you explain this answer?
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    Consider the following statements with respect to Free Trade Warehousing Zones (FTWZs): The Units operating in the FTWZs are allowed to import goods duty-free and re-export these goods without paying duty. Units can be set up in the FTWZ by foreign companies with 100% FDI under the automatic route. All transactions in an FTWZ are only in convertible foreign currency. Which of the statements given above are correct?a)1 and 3 onlyb)2 and 3 onlyc)1, 2 and 3d)NoneCorrect answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements with respect to Free Trade Warehousing Zones (FTWZs): The Units operating in the FTWZs are allowed to import goods duty-free and re-export these goods without paying duty. Units can be set up in the FTWZ by foreign companies with 100% FDI under the automatic route. All transactions in an FTWZ are only in convertible foreign currency. Which of the statements given above are correct?a)1 and 3 onlyb)2 and 3 onlyc)1, 2 and 3d)NoneCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements with respect to Free Trade Warehousing Zones (FTWZs): The Units operating in the FTWZs are allowed to import goods duty-free and re-export these goods without paying duty. Units can be set up in the FTWZ by foreign companies with 100% FDI under the automatic route. All transactions in an FTWZ are only in convertible foreign currency. Which of the statements given above are correct?a)1 and 3 onlyb)2 and 3 onlyc)1, 2 and 3d)NoneCorrect answer is option 'C'. Can you explain this answer?.
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