The government on Wednesday cleared a major central legislation to provide duty free environment, single window clearance and more tax incentives to special economic zones to make exports the engine of economic growth.

The SEZ legislation cleared by the Union Cabinet also aims at providing competitive fiscal package both at central and state level with minimum regulatory regime and quality infrastructure, Commerce and Industry Minister Arun Jaitley told reporters in New Delhi.

"Finance ministry had extended to us a significant revenue regime which flows from within the law itself," he said.

Existing incentives and facilities like exemption from customs and excise duty for development of SEZ and setting up of units, Income-Tax, sales tax and service tax exemption would be incorporated in the new legislation to impart stability to the fiscal regime.

Under the new legislation, SEZs would be treated as deemed foreign territory and supplies from domestic industry would be treated as exports.

Asked if the legislation gave SEZs the freedom to enforce existing labour laws, he said the Bill contained an enabling provision but as labour was a state subject they would have to bring in their own state legislation.

With the enactment of this Bill, the commerce ministry would become the nodal agency for SEZs with all fiscal powers flowing from the Act itself.