Tax-free zone

A tax-free zone is a designated area within a country where certain taxes, such as customs duties, sales tax, or other indirect taxes, are reduced or entirely exempted. These zones are created to encourage trade, attract foreign investment, promote industrial development, and boost exports. Businesses operating in these zones often benefit from simplified regulations and tax incentives.

Example: The Jawaharlal Nehru Port Trust (JNPT) Special Economic Zone in India allows companies to import raw materials, manufacture goods, and export products without paying customs duties or GST, creating a tax-free environment to stimulate industrial activity and international trade.