| Eligibility |
6.1 |
Units undertaking to export their entire production of goods and
services (except permissible sales in DTA),may be set up under the
Export Oriented Unit (EOU) Scheme, Electronics Hardware Technology Park
(EHTP) Scheme, Software Technology Park (STP) Scheme or Bio-Technology
Park (BTP) Scheme for manufacture of goods, including repair, re-making,
reconditioning, reengineering and rendering of services. Trading units
are not covered under these schemes.
|
| Export and Import of goods |
6.2 |
(a) An EOU / EHTP / STP / BTP unit may export all kinds of goods and
services except items that are prohibited in ITC (HS). Export of Special
Chemicals,Organisms, Materials, Equipment and Technologies (SCOMET)
shall be subject to fulfillment of the conditions indicated in ITC(HS).
Procurement and supply of export promotion material like brochure /
literature, pamphlets, hoardings,catalogues, posters etc. upto a maximum
value limit of 1 .5% of FOB value of previous years exports shall also
be allowed.
(b) An EOU / EHTP / STP / BTP unit may import and/or procure, from DTA
or bonded warehouses in DTA / international exhibition held in India,
without payment of duty, all types of goods, including capital goods,
required for its activities, provided they are not prohibited items of
import in the ITC (HS). Any permission required for import under any
other law shall be applicable. Units shall also be permitted to import
goods including capital goods required for approved activity, free of
cost or on loan / lease from clients. Import of capital goods will be on
a self certification basis. Goods imported by a unit shall be with
actual user condition and shall be utilized for export production.
(c) State Trading regime shall not apply to EOU manufacturing units.
However, in respect of Chrome Ore / Chrome concentrate, State Trading
Regime as stipulated in export policy of these items, will be applicable
to EOUs.
(d) EOU / EHTP / STP / BTP units may import / procure from DTA, without
payment of duty, certain specified goods for creating a central
facility. Software EOU/DTA units may use such facility for export of
software.
(e) An EOU engaged in agriculture, animal husbandry, aquaculture,
floriculture, horticulture, pisciculture, viticulture, poultry or
sericulture may be permitted to remove specified goods in connection
with its activities for use outside bonded area.
(f) Gems and jewellery EOUs may source gold / silver/ platinum through
nominated agencies on loan / outright purchase basis. Units obtaining
gold/ silver/ platinum from nominated agencies, either on loan basis or
outright purchase basis shall export gold/ silver / platinum within 90
days from date of release.
(g) EOU / EHTP / STP / BTP units, other than service units, may export
to Russian Federation in Indian Rupees against repayment of State Credit
/ Escrow Rupee Account of buyer subject to RBI clearance, if any.
(h) Procurement and export of spares / components, upto 5 % of FOB value
of exports, may be allowed to same consignee / buyer of the export
article, subject to the condition that it shall not count for NFE and
direct tax benefits.
(i) BoA may allow, on a case to case basis, requests of EOU / EHTP / STP
/ BTP units in sectors other than Gems & Jewellery, for consolidation of
goods related to manufactured articles and export thereof along with
manufactured article. Such goods may be allowed to be imported /
procured from DTA by EOU without payment of duty, to the extent of 5 %
FOB value of such manufactured articles exported by the unit in
preceding financial year. Details of procured / imported goods and
articles manufactured by the EOU will be listed separately in the export
documents. In such cases, value of procured /imported goods will not be
taken into account for calculation of NFE, DTA sale entitlement &
profits
accruing out of such procured / imported goods will not be eligible for
income tax benefits. Such procured/ imported goods shall not be allowed
to be sold in DTA. BoA may also specify any other conditions. |
| Second Hand capital goods |
6.3 |
Second hand capital goods, without any age limit, may also be
imported duty free. |
| Leasing of
Capital Goods |
6.4 |
a) An EOU / EHTP / STP / BTP unit may, on the basis of a firm contract
between parties, source capital goods from a domestic / foreign leasing
company without payment of customs / excise duty. In such a case, EOU /
EHTP / STP / BTP unit and domestic /foreign leasing company shall
jointly file documents to enable import / procurement of capital goods
without payment of duty.
b) An EOU / EHTP / BTP / STP unit may sell capital goods and lease back
the same from a Non Banking Financial Company (NBFC), subject to the
following conditions:
-
The unit should obtain permission from the jurisdictional Deputy /
Assistant Commissioner of Customs or Central Excise, for entering into
transaction of ‘Sale and Lease Back of Assets’,and submit full details
of the goods to be sold and leased back and the details of NBFC;
-
The goods sold and leased back shall not be removed from the unit’s
premises;
-
The unit should be NFE positive at the time when it enters into
sale and lease back transaction with NBFC;
-
A joint undertaking by the unit and NBFC should be given to pay duty
on goods in case of violation or contravention of any provision of the
notification under which these goods were
imported or procured, read with Customs Act,1962 or Central Excise Act,
1 944, and that the lien on the goods shall remain with the
Customs/Central Excise Department, which will have first charge over the
said goods for recovery of sum due from the unit to Government under
provision of Section 142 (b) of the Customs Act, 1 962 read with the
Customs (Attachment of Property of Defaulters for Recovery of Govt
.Dues) Rules, 1995.
|
| Net Foreign Exchange Earnings
(NFE) |
6.5 |
EOU / EHTP / STP / BTP unit shall be a positive
net foreign exchange earner except for sector specific provision of
Appendix 14 -I-C of HBP v1, where a higher value addition shall be
required. NFE earnings shall be calculated cumulatively in blocks of
five years, starting from commencement of production. Whenever a unit is
unable to export due to prohibition / restriction imposed on export of
any product mentioned in LoP, the five year block period for calculation
of NFE earnings may be suitably extended by BoA. BoA may also consider
extension of block period by another one year,for calculation of NFE, on
case to case basis, for those units which complete 5 years block period
in between 30.09.2008 and 3 0.09.2009, keeping in view the decline in
exports in that particular unit, due to economic slow down only.
|
| Letter of Permission / / Letter of Intent and
Legal Undertaking
|
6.6 |
(a) On approval, a Letter of Permission (LoP) / Letter of Intent (LoI)
shall be issued by DC / designated officer to EOU / EHTP / STP / BTP
unit. LoP / LoI shall have an initial validity of 3 years, by which time
unit should have commenced production.Its validity may be extended
further up to 3 years by competent authority. However, proposals for
extension beyond six years shall be considered in exceptional
circumstances, on a case-to-case basis by BoA. Once unit commences
production, LoP/ LoI issued shall be valid for a period of 5 years for
its activities. This period may be extended further by DC for a period
of 5 years at a time.
(b) LoP / LoI issued to EOU / EHTP / STP / BTP units by concerned
authority, subject to compliance of provision in para 6.2 above, would
be construed as an Authorisation for all purposes.
(c) Unit shall execute an LUT with DC concerned. Failure to ensure
positive NFE or to abide by any of the terms and conditions of LoP / LoI
/ IL / LUT shall render the unit liable to penal action under provisions
of the FT (D&R) Act and Rules and Orders made thereunder,without
prejudice to action under any other law / rules and cancellation or
revocation of
LoP / LoI / IL.
|
| Investment Criteria |
|
(d) Only projects having a minimum investment of Rs. 1 Crore in plant &
machinery shall be considered for establishment as EOUs. However, this
shall not apply to existing units and units in EHTP / STP / BTP,
Handicrafts / Agriculture / Floriculture / Aquaculture/ Animal
Husbandry / Information Technology, Services, Brass Hardware and
Handmade jewellery
sectors. BoA may also allow establishment of EOUs with a lower
investment criteria.
|
| Application & Approval |
6.7 |
(a) Applications for setting up of units under EOU scheme, other than
proposals for setting up of units in services sector (except R&D,
software and IT enabled services, or any other service activity as may
be delegated by BoA), shall be approved or rejected by the Units
Approval Committee within 15 days as per criteria indicated in HBP v1.
(b) In other cases, approval may be granted by BoA set up for this
purpose as indicated in HBP v 1.
(c) Proposals for setting up EOU requiring industrial licence may be
granted approval by DC after clearance of proposal by BoA and DIPP
within 45 days.
(d) Applications for conversion into an EOU / EHTP/ STP / BTP unit from
existing DTA units, having an investment of Rs. 5 0 crores and above in
plant and machinery or exporting Rs. 5 0 crores and above annually,
shall be placed before BoA for a decision.
|
| DTA Sale of Finished Products /
Rejects / Waste / Scrap /Remnants and
By-products |
6.8 |
Entire production of EOU / EHTP / STP / BTP units shall be exported
subject to following:
(a) Units, other than gems and jewellery units, may sell goods upto 5 0%
of FOB value of exports, subject to fulfilment of positive NFE, on
payment of concessional duties. Within entitlement of DTA sale, unit may
sell in DTA, its products similar to goods which are exported or
expected to be exported from units. However, units which are
manufacturing and
exporting more than one product can sell any of these products into DTA,
upto 90% of FOB value of export of the specific products, subject to the
condition that total DTA sale does not exceed the overall entitlement of
5 0% of FOB value of exports for the unit, as stipulated above. No DTA
sale at concessional duty shall be permissible in respect of motor cars,
alcoholic liquors, books, tea (except instant tea), pepper & pepper
products, marble and such other items as may be notified from time to
time. Such DTA sale shall also not be permissible to units engaged in
activities of packaging / labeling / egregation / refrigeration/
compacting / micronisation / pulverization /granulation / conversion of
monohydrate form of chemical to anhydrous form or vice-versa. Sales made
to a unit in SEZ shall also be taken into account for purpose of
arriving at FOB value of export by EOU provided payment for such sales
are made from Foreign Exchange Account of SEZ unit. Sale to DTA would
also be subject to mandatory requirement of registration of
pharmaceutical products (including bulk drugs). An amount equal to Anti
Dumping duty under section 9A of the Customs Tariff Act, 1975 leviable
at the time of import, shall be payable on the goods used for the
purpose of manufacture or processing of the goods cleared into DTA from
the unit.
(b) For services, including software units, sale in DTA in any mode,
including on line data communication, shall also be permissible up to 5
0% of FOB value of exports and /or 5 0% of foreign exchange earned,
where payment of such services is received in foreign exchange.
(c) Gems and jewellery units may sell upto 1 0% of FOB value of exports
of the preceding year in DTA, subject to fulfillment of positive NFE. In
respect of sale of plain jewellery, recipient shall pay concessional
rate of duty as applicable to sale from nominated agencies. In respect
of studded jewellery, duty shall be payable as applicable.
(d) Unless specifically prohibited in LoP, rejects within an overall
limit of 5 0% may be sold in DTA on payment of duties as applicable to
sale under sub-para 6.8(a) on prior intimation to Customs authorities.
Such sales shall be counted against DTA sale entitlement. Sale of
rejects upto 5 % of FOB value of exports shall not be subject to
achievement of NFE.
(e) Scrap / waste / remnants arising out of production process or in
connection therewith may be sold in DTA, as per SION notified under Duty
Exemption Scheme, on payment of concessional duties as applicable,
within overall ceiling of 5 0% of FOB value of exports. Such sales of
scrap / waste /remnants shall not be subject to achievement of positive
NFE. In respect of items not covered by norms, DC may fix ad-hoc norms
for a period of six
months and within this period, norms should be fixed by Norms Committee.
Ad-hoc norms will continue till such time norms are fixed by Norms
Committee. Sale of waste / scrap / remnants by units not entitled to DTA
sale, or sales beyond DTA sale entitlement, shall be on payment of full
duties. Scrap / waste /remnants may also be exported.
(f) There shall be no duties / taxes on scrap / waste / remnants, in
case same are destroyed with permission of Customs authorities.
(g) By-products included in LoP may also be sold in DTA subject to
achievement of positive NFE, on payment of applicable duties, within the
overall entitlement of sub-para 6.8(a). Sale of by-products by units not
entitled to DTA sales, or beyond entitlements of subpara 6.8 (a), shall
also be permissible on payment of full duties.
(h) EOU / EHTP / STP / BTP units may sell finished products, except
pepper and pepper products and marble, which are freely importable under
FTP in DTA, under intimation to DC, against payment of full duties,
provided they have achieved positive NFE. An amount equal to Anti
Dumping duty under section 9A of the Customs Tariff Act, 1975 leviable
at the time of import, shall be payable on the goods used for the
purpose of manufacture or processing of the goods cleared into DTA from
the unit.
(i) In case of units manufacturing electronics hardware and software,
NFE and DTA sale entitlement shall be reckoned separately for hardware
and software.
(j) In case of DTA sale of goods manufactured by EOU/EHTP / STP / BTP,
where basic duty and CVD is nil,such goods may be considered as
non-excisable for payment of duty.
(k) In case of new EOUs, advance DTA sale will be allowed not exceeding
5 0% of its estimated exports for first year, except pharmaceutical
units where this will be based on its estimated exports for first two
years.
(l) Units in Textile and Granite sectors shall have an option to sell
goods into DTA in terms of sub- paras 6.8 (a), (d), (e), (g) and (k)
above, on payment of an amount equal to aggregate of duties of excise
leviable under section 3 of the Central Excise Act, 1 944 or under any
other law for the time being in force, on like goods produced or
manufactured in India other than in an EOU, subject to the condition
that they have not used duty paid imported inputs in excess of 3 % of
the FOB value of exports of the preceding year and they have achieved
positive NFE. Once this option is exercised, the unit will not be
allowed to import any duty free inputs for any purpose.
|
| Other Supplies in DTA |
6.9 |
Following supplies effected from EOU / EHTP / STP/ BTP units to DTA
will be counted for fulfillment of positive NFE:
(a) Supplies effected in DTA to holders of Advance Authorisation /
Advance Authorisation for annual requirement / DFIA under duty exemption
/ remission scheme / EPCG scheme. However, printing sector EOUs (or any
other sector that may be notified in HBP v 1 ), can not supply goods,
where basic customs duty and CVD is nil or exempted otherwise, to
holders of Advance Authorisation / Advance Authorization for annual
requirement.
(b) Supplies effected in DTA against foreign exchange remittance
received from overseas.
(c) Supplies to other EOU / EHTP / STP / BTP / SEZ units, provided that
such goods are permissible for procurement in terms of para 6.2 of FTP.
(d) Supplies made to bonded warehouses set up under FTP and / or under
section 65 of Customs Act and free trade and warehousing zones, where
payment is received in foreign exchange.
(e) Supplies of goods and services to such organizations which are
entitled for duty free import of such items in terms of general
exemption notification issued by MoF, as may be provided in HBP v 1.
(f) Supplies of Information Technology Agreement (ITA -1) items and
notified zero duty telecom / electronics items.
(g) Supplies of items like tags, labels, printed bags,stickers, belts,
buttons or hangers to DTA unit for export.
(h) Supply of LPG produced in an EOU refinery to Public Sector domestic
oil companies for being supplied to household domestic consumers at
subsidized prices under the Public Distribution System (PDS) Kerosene
and Domestic LPG Subsidy Scheme, 2 002, as notified by the Ministry of
Petroleum and Natural Gas vide notification No. E-20029/18/2001-PP dated
28.01.2003 (hereinafter referred to as PDS Scheme) subject to the
following conditions:-
(a) Only supply of such quantity of LPG would be eligible for which
Ministry of Petroleum and Natural Gas declines permission for export and
requires the LPG to be cleared in DTA; and
(b) The Ministry of Finance by a notification has permitted duty free
imports of LPG for supply under the aforesaid PDS Scheme.
|
| Export through other |
6.10 |
An EOU / EHTP / STP / BTP unit may export goods manufactured /
software developed by it through another exporter or any other EOU /
EHTP / STP / SEZ unit subject to conditions mentioned in para 6.18 of
HBP v1.
|
| Entitlement for Supplies from the DTA |
6.11 |
(a) Supplies from DTA to EOU / EHTP / STP / BTP units will be regarded
as “deemed exports” and DTA supplier shall be eligible for relevant
entitlements under chapter 8 of FTP, besides discharge of export
obligation, if any, on the supplier. Notwithstanding the above, EOU /
EHTP / STP / BTP units shall, on production of a suitable disclaimer
from DTA supplier, be eligible for obtaining entitlements specified in
chapter 8 of FTP. For claiming deemed export duty drawback, they shall
get brand rates fixed by DC wherever All Industry Rates of Drawback are
not available.
(b) Suppliers of precious and semi-precious stones, synthetic stones and
processed pearls from DTA to EOU shall be eligible for grant of
Replenishment Authorisations at rates and for items mentioned in HBP v1.
(c) In addition, EOU / EHTP / STP / BTP units shall be entitled to
following:-
(i) Reimbursement of Central Sales Tax (CST) on goods manufactured in
India.
Simple interest @ 6% per annum will be payable on delay in refund of
CST, if the case is not settled within 3 0 days of receipt of complete
application (as in paragraph 9.10.1 of HBP v1).
(ii) Exemption from payment of Central Excise Duty on goods procured
from DTA on goods
manufactured in India.
(iii) Reimbursement of duty paid on fuel procured from domestic oil
companies / Depots of
domestic oil Public Sector Undertakings as per drawback rate notified by
DGFT from time to
time. Reimbursement of additional duty of excise levied on fuel under
the Finance Acts would also be admissible.
(iv) CENVAT Credit on service tax paid.
|
| Other Entitlements
|
6.12 |
Other entitlements of EOU / EHTP / STP / BTP units are as under:
(a) Exemption from Income Tax as per Section 1 0A and 10B of Income Tax
Act.
(b) Exemption from industrial licensing for manufacture of items
reserved for SSI sector.
(c) Export proceeds will be realized within 12 months.
(d) Units will be allowed to retain 1 00% of its export earning in the
EEFC account.
(e) Unit will not be required to furnish bank guarantee at the time of
import or going for job work in DTA, where unit has
(i) a turnover of Rs. 5 crores or above;
(ii) unit is in existence for at least three years; and
(iii) The unit:
(a) has achieved positive NFE / export obligation wherever applicable;
(b) has not been issued a show cause notice or a confirmed demand,
during the preceding
3 years, on grounds other than procedural violations, under the penal
provision of the Customs Act, the Central Excise Act, the Foreign Trade
(Development & Regulation) Act, the Foreign Exchange Management Act, the
Finance Act, 1 994 covering Service Tax or any allied Acts or the rules
made thereunder, on account of fraud / collusion / willful mis-statement
/ suppression of facts or contravention of any of the provisions
thereof; (f) 100% FDI investment permitted through automatic route similar to SEZ
units.
(g) Units shall pay duty on the goods produced or manufactured and
cleared into DTA on monthly basis in the manner prescribed in the
Central Excise Rules.
|
| Inter Unit Transfer |
6.13 |
(a) Transfer of manufactured goods from one EOU / EHTP / STP / BTP unit
to another EOU / EHTP / STP / BTP unit is allowed with prior intimation
to concerned DC and Customs authorities, following procedure of in-bond
movement of goods. Transfer of manufactured goods shall also be allowed
from EOU / EHTP / STP / BTP unit to a SEZ developer or unit following
procedure prescribed in SEZ Rules,2006.
(b) Capital goods may be transferred or given on loan to other EOU /
EHTP / STP / BTP / SEZ units, with prior intimation to concerned DC and
Customs authorities.
(c) Goods supplied by one unit of EOU / EHTP / STP / BTP to another unit
shall be treated as imported goods for second unit for payment of duty,
on DTA sale by second unit.
|
| Sub-Contracting |
6.14 |
(a) (i) EOU / EHTP / STP / BTP units, including gems and jewellery
units, may on the basis of annual permission from Customs authorities,
subcontract production processes to DTA through job work which may also
involve change of form or nature of goods, through job work by units in
DTA.
(ii) These units may subcontract upto 50% of overall production of
previous year in value terms in DTA with permission of Customs
authorities.
(b) (i) EOU may, with annual permission from Customs authorities,
undertake job work for export, on behalf of DTA exporter, provided that
goods are exported directly from EOU and export document shall jointly
be in name of DTA / EOU. For such exports, DTA units will be entitled
for refund of duty paid on inputs by way of brand rate of duty drawback.
(ii) Duty free import of goods for execution of export order placed on
EOU by foreign supplier on jobwork basis, would be allowed subject to
condition that no DTA clearance shall be allowed.
(iii) Subcontracting of both production and production processes may
also be undertaken
without any limit through other EOU / EHTP / STP / BTP / SEZ units, on
the basis of records
maintained in unit.
(iv) EOU / EHTP / STP / BTP units may subcontract part of production
process abroad and send intermediate products abroad as mentioned in LoP.
No permission would be required
when goods are sought to be exported from subcontractor premises abroad.
When goods
are sought to be brought back, prior intimation to concerned DC and
Customs authorities shall be given.
(c) Scrap / waste / remnants generated through job work may either be
cleared from job worker’s premises on payment of applicable duty on
transaction value or destroyed in presence of Customs / Central Excise
authorities or returned to unit. Destruction shall not apply to gold,
silver, platinum, diamond, precious and semi precious stones.
(d) Sub-contracting / exchange by gems and jewellery EOUs through other
EOUs or SEZ units or units in DTA, shall be as per procedure indicated
in HBP v1.
|
| Sale of Unutilized Material |
6.15 |
(a) In case an EOU / EHTP / STP / BTP unit is unable to utilize goods
and services, imported or procured from DTA, it may be
(i) transferred to another EOU / EHTP / STP /BTP/ SEZ unit; or
(ii) disposed off in DTA with approval of Customs authorities on payment
of applicable duties and submission of import authorization; or
(iii) exported. Such transfer from EOU / EHTP / STP / BTP unit to
another such unit would be treated as import for receiving unit.
(b) Capital goods and spares that have become obsolete /surplus, may
either be exported, transferred to another EOU / EHTP / STP / BTP / SEZ
unit or disposed off in DTA on payment of applicable duties. Benefit of
depreciation, as applicable, will be available in case of disposal in
DTA only when the unit has achieved positive NFE taking into
consideration the depreciation allowed. No duty shall be payable in case
capital goods, raw material, consumables, spares, goods manufactured,
processed or packaged, and scrap / waste / remnants / rejects are
destroyed within unit after intimation to Customs authorities or
destroyed outside unit with permission of Customs authorities.
Destruction as stated above shall not apply to gold, silver, platinum,
diamond, precious and semi precious stones.
(c) In case of textile sector, disposal of left over material / fabrics
upto 2% of cif value or quantity of import, whichever is lower, on
payment of duty on transactionvalue, may be allowed, subject to certification of Central Excise /
Customs officers that these are leftover items.
(d) Disposal of used packing material will be allowed on payment of duty
on transaction value
|
| Reconditioning/ repair, &
Re-engineering |
6.16 |
EOU / EHTP / STP / BTP units may be set up with
approval of BoA to carry out reconditioning, repair, remaking, testing,
calibration, quality improvement, upgradation
of technology and re-engineering activities for export in foreign
currency. Provisions of paragraphs 6.8,6.9, 6.10, 6.13, 6.14 of FTP and
para 6.28 of HBP v1 shall not, however, apply to such activities.
|
| Replacement/ Repair of
Imported/ Indigenous Goods |
6.17 |
(a) General provisions of FTP relating to export / import of replacement
/ repair of goods would also apply equally to EOU / EHTP / STP / BTP
units. Cases not covered by these provisions shall be considered on
merits by DC.
(b) Goods sold in DTA and not accepted for any reasons, may be brought
back for repair / replacement, under intimation to concerned
jurisdictional Customs / Central Excise authorities.
(c) Goods or parts thereof, on being imported / indigenously procured
and found defective or otherwise unfit for use or which have been
damaged or become defective subsequently, may be returned and
replacement obtained or destroyed. In the event of replacement, goods
may be brought back from foreign suppliers or their authorized agents in
India or indigenous suppliers. The unit can take free of cost
replacement (duty paid) from the authorized agents in India of foreign
suppliers, provided the defective part is re-exported or destroyed.
However, destruction shall not apply to precious and semi precious
stones and precious metals.
|
| Exit from EOU Scheme |
6.18 |
(a) With approval of DC, an EOU may opt out of scheme. Such exit shall be
subject to payment of Excise and Customs duties and industrial policy in
force.
(b) If unit has not achieved obligations, it shall also be liable to
penalty at the time of exit.
(c) In the event of a gems and jewellery unit ceasing its operation,
gold and other precious metals, alloys, gems and other materials
available for manufacture of jewellery, shall be handed over to an
agency nominated by DoC, at price to be determined by that agency.
(d) An EOU / EHTP / STP / BTP unit may also be permitted by DC to exit
from the scheme at any time on payment of duty on capital goods under
the prevailing EPCG Scheme for DTA Units. This will be subject to
fulfillment of positive NFE criteria under EOU scheme, eligibility
criteria under EPCG scheme and standard conditions indicated in HBP v 1.
(e) Unit proposing to exit out of EOU scheme shall intimate DC and
Customs and Central Excise authorities in writing. Unit shall assess
duty liability arising out of debonding and submit details of such
assessment to Customs and Central Excise authorities. Customs and
Central Excise authorities shall confirm duty liabilities on priority
basis, subject to the condition that the unit has achieved positive NFE,
taking into consideration the depreciation allowed. After payment of
duty and clearance of all dues, unit shall obtain “No Dues Certificate”
from Customs and Central Excise authorities. On the basis of “No Dues
Certificate” so issued by the Customs and Central Excise authorities,
unit shall apply to DC for final debonding.
In case there is no proceeding pending under FT(D&R) Act, DC shall issue
final debonding order within a period of 7 working days. Between “No
Dues Certificate” issued by Customs and Central Excise authorities and
final debonding order by DC, unit shall not be entitled to claim any
exemption for procurement of capital goods or inputs. However, unit can
claim Advance Authorisation / DEPB /Duty Drawback. Since the duty
calculations and dues are disputed and take a long time, a BG / Bond /
Installment processes backed by BG shall be provided for expediting the
exit process.
(f) In cases where a unit is initially established as DTA unit with
machines procured from abroad after payment of applicable import duty,
or from domestic market after payment of excise duty, and unit is
subsequently converted to EOU, in such cases removal of such capital
goods to DTA after debonding would be without payment of duty.
Similarly, in cases where a DTA unit imported capital goods under EPCG
Scheme and after completely fulfilling export obligation gets converted
into EOU, unit would not be charged customs duty on capital goods at the
time of removal of such capital goods in DTA when debonding.
(g) An EOU / EHTP / STP / BTP unit may also be permitted by DC to exit
under Advance Authorization as a one time option. This will be subject
to fulfillment of positive NFE criteria.
|
| Conversion |
6.19 |
(a) Existing DTA units may also apply for conversion into an EOU / EHTP
/ STP / BTP unit, and Income Tax benefits under Section 10A and 10B will
be available for plant, machinery and equipment already installed.
(b) Existing EHTP / STP units may also apply for conversion / merger to
EOU and vice-versa. In such cases, units will remain in bond and avail
exemptions in duties and taxes as applicable.
|
| Monitoring of NFE |
6.20 |
Performance of EOU / EHTP / STP / BTP units shall be monitored by
Units Approval Committee as per guidelines in HBP v1.
|
Export through
Exhibitions / Export
Promotion Tours /
showrooms abroad /
Duty Free Shops |
6.21
|
EOU / EHTP / STP / BTP are permitted to:
i) Export goods for holding / participating in exhibitions abroad with
permission of DC.
ii) Personal carriage of gold / silver / platinum jewellery, precious,
semi-precious stones, beads and articles.
iii) Export goods for display / sale in permitted shops set up abroad.
iv) Display / sell in permitted shops set up abroad, or in showrooms of
their distributors / agents.
v) Set up showrooms / retail outlets at International Airports.
|
Personal Carriage of
Import / Export Parcels
including through Foreign
bound Passengers |
6.22
|
Import / export through personal carriage of gems and jewellery
items may be undertaken as per Customs procedure. However, export
proceeds shall be realized through normal banking channel. Import /
export through personal carriage by units, other than gems and jewellery
units, shall be allowed provided goods are not in commercial quantity.
An authorized person of Gems & Jewellery EOU may also import gold in
primary form, upto 10 Kgs in a financial year through personal carriage,
as per guidelines prescribed by RBI and DoR.
|
Export / Import by Post
/ Courier |
6.23
|
Goods including free samples, may be exported / imported by
airfreight or through foreign post office or through courier, as per
Customs procedure. |
| Administration of EOUs / Powers of
Development Commissioner |
6.24
|
Details of administration of EOUs and powers of are given in HBP v1.
Development
Commissioner |
| Revival of Sick Units. |
6.25 |
Subject to a unit being declared sick by appropriate authority, proposals for revival of the unit or its take over may be considered
by BoA .
|
| Approval of EHTP/STP |
6.26 |
In case of units under EHTP / STP schemes, necessary approval /
permission under relevant paragraphs of this Chapter shall be granted by
officer designated by Ministry of Communication and Information
Technology, Department of Information Technology, instead of DC, and by
Inter-Ministerial Standing Committee (IMSC) instead of BoA.
|
| Approval of BTP |
6.27
|
Bio-Technology Parks (BTP) would be notified by DGFT on
recommendations of Department of Biotechnology. In case of units in BTP,
necessary approval / permission under relevant provisions of this
chapter will be granted by designated officer of Department of
Biotechnology. |