| Scheme |
6.1 |
The Policy relating to Export Oriented Units (EOUs), Electronics
Hardware Technology Parks (EHTPs),Software Technology Parks (STPs) and
Bio-Technology parks(BTPs) Scheme is given in Chapter 6 of the Foreign
Trade Policy. |
| Definitions |
6.2 |
For the purpose of Export Oriented Units (EOUs), Electronics
Hardware Technology Parks (EHTPs), Software Technology Parks (STPs) and
Bio-Technology Parks (BTPs) unless the context otherwise requires, the
words and expressions shall have the meanings attached to them as given
in the Policy. |
| Approval/Application and renewal of Application |
6.3.1 |
For setting up an EOU, three copies of the application in the form
given in Appendix- 14-IA may be submitted to the Development
Commissioner. |
|
6.3.2 |
Applications for setting up of units under EOU scheme other than
proposals for setting up of unit in the service sector (except R&D,
software and IT enabled services, or any other service activity as may
be delegated by the BOA), shall be approved or rejected by the Units
Approval Committee within 15 days as per the criteria indicated in
Appendix-14-IB and sector specific conditions relating to the approval
given in Appendix- 14-IC. In other cases, approval may be granted by the
Development Commissioner after clearance by the Board of Approval. |
|
6.3.3 |
Proposals for setting up EOU requiring industrial licence may be
granted approval by the Development Commissioner after clearance of the
proposal by the Board of Approval (as per Appendix-14-ID) and Department
of Industrial Policy and Promotion within 45 days on merits. |
|
6.3.4.1 |
Software Technology Park (STP)/Electronics Hardware Technology Park
(EHTP) complexes can be set up by the Central Government, State
Government, Public or Private Sector Undertakings or any combination
thereof, duly approved by the Inter-Ministerial Standing Committee
(IMSC) in the Ministry of Communication and Information Technology
(Department of Information Technology). Application for setting up
EHTP/STP unit shall be in the format prescribed by the Ministry of
Communication and Information Technology (Department of Information
Technology) and shall be submitted to the officer designated by the
Department of Information Technology. |
|
6.3.4.2 |
Bio-Technology Park (BTP) can be set up by the Central Government,
State Government, Public or Private Sector Undertakings or any
combination thereof. Application for setting up of BTP shall be
submitted to the Department of Bio- Technology and such applications
which meet the guidelines prescribed by the Department of Bio-Technology
will be approved and recommended to the DGFT for notification.
Application for setting up of BTP unit shall be submitted to the Officer
designated by the Department of Bio-Technology. |
|
6.3.6 |
The LOP/LOI shall specify the item(s) of manufacture/service
activity, annual capacity, projected annual export for the first five
years in dollar terms, Net Foreign Exchange earnings (NFE), limitations,
if any, regarding sale of finished goods, by-products and rejects in the
DTA and such other matter as may be necessary and also impose such
conditions as may be required. |
|
6.3.7 |
LOP/LOI issued to EOU/EHTP/STP/BTP units by the concerned authority
would be construed as an authorisation for all purposes. Standard format
for LOP for EOU units is given in Appendix 14-IE . |
|
6.3.8 |
EOUs shall have separate earmarked premises for separate LOP.
Similarly, EOUs may be approved on leased premises provided the lease
has been obtained from Government Department / Undertaking / Agency.
However, in case lease is obtained from private parties, it shall have a
validity period of five years from the date of LUT and the Development
Commissioner shall satisfy himself of genuine nature of the lease. |
|
6.3.9 |
On completion of the approval period as provided for in paragraph
6.6 of Policy, it shall be open to the unit to continue under the scheme
or opt out of the scheme. If no intimation in this regard is received
from the unit within a period of six months of expiry of the approval
period, the Development Commissioner will take action, suo moto, to
cancel the approval under the EOU scheme and take further action in this
regard. Where the unit opts to continue, the Development Commissioner
concerned will extend the approval period. |
| Legal Undertaking |
6.4.1 |
The approved EOU/EHTP/STP/BTP unit shall execute a legal undertaking
with the Development Commissioner / Designated Officer concerned as per
the format given in Appendix- 14- IF. |
|
6.4.2 |
All EOU/EHTP/STP/BTP units should have permanent e.mail address . No
LUT for new units shall be executed unless the unit has its permanent
e-mail address and digital signature on the said e-mail ID. In the event
of an EOU not having permanent e-mail address and digital signature,
further imports and DTA sale shall not be permitted by the Development
Commissioner. |
| Export of goods and services |
6.5.1 |
Software units may undertake exports using data communication links
or in the form of physical exports (which may be through courier service
also), including export of professional services. |
|
6.5.2 |
The EOUs shall be permitted to export jewellery on the basis of a
notional rate certificate issued by the nominated agency. This rate will
be based on the prevailing Gold/US$ rate and the US$/INR rate in the
notional rate certificate. The certificate issued by the nominated
agency should not be older than 3 working days of the date of shipment. |
|
6.5.3 |
The exporter shall have the flexibility to fix the price and repay
the gold loan within 180 days from the date of export. The price shall
be communicated to the nominated agencies who will issue a certificate
showing the final confirmation of the rate to the bank negotiating the
document, to ensure export proceeds are realized at this rate. |
|
6.5.4 |
Gem & Jewellery and Jewellery EOUs may re-export imported goods and
export domestically procured goods, including goods generated out of
partial processing / manufacture. Besides, supply of unsuitable/ broken
cut and polished diamonds, precious and semi-precious stones upto 5% of
the value of imported or indigenously procured goods to the DTA against
the valid Gem & Jewellery REP as applicable on payment of appropriate
duty is also permitted. |
| Import / Domestic Procurement of Goods |
6.6.1 |
Goods permitted to be imported /procured from Domestic Tariff Area
shall include:
- Raw materials, components, consumables, intermediates, spares
and packing materials:
- Capital goods, whether new or second-hand, including inter-alia
the following and their spares:
- DG sets, captive power plants, transformers and accessories
for all above.
- Pollution control equipment.
- Quality assurance equipment.
- Material handling equipment, like fork lifts and overhead
cranes, mobile cranes,crawler cranes, hoists and stackers.
- Un-interrupted Power Supply System (UPS), Special racks for
storage, storage systems, modular furniture, computer furniture,
anti-static carpet, teleconference equipment, Servo Control
System, Air-conditioners / Airconditioning system, panel for
electricals and special data transmission cable .
- Security Systems.
- Tools, jigs, fixtures, gauges, moulds, dyes, instruments and
accessories.
- Raw material for making capital goods for use within the unit.
- others including:
- Prototypes and technical samples for existing product(s) and
product diversification development or evaluation;
- Drawings, blue prints, charts, microfilms and technical
data;
- Office equipment, including PABX, Fax machines, projection
system, Computers, Laptop, server.
- Spares and consumables for all the above items.
- Any other items not mentioned above with the approval of Board
of Approval.
|
|
6.6.2 |
EOUs may import plain/studded gold/platinum or silver jewellery for
export after repairs/remaking. |
| Conditions of Import |
6.7 |
The import of goods by EOU/EHTP/STP/BTP units shall be subject to
the following conditions:
- The goods shall be imported into the EOU / EHTP / STP / BTP
premises. However, agriculture and allied sectors and granite sector
units in EOU may supply/ transfer the capital goods and the inputs
in the farm/ fields/ quarries with prior intimation to the
jurisdictional Customs/ Central Excise authorities, provided the
ownership of the goods rests with EOU units. The granite sector
would also be allowed to take spares upto 5% of the value of the
Capital Goods to the quarry site.
- The procedure as prescribed under Customs/Excise rules for EOUs
and units in EHTP/STP/BTP will be followed and appropriate bond
executed with Customs/ Excise authorities.
- The goods, except capital goods and spares, shall be utilised by
EOU/EHTP/STP/BTP units within a period of three years or as may be
extended by Customs authorities. However, imported tea shall be
utilized within a period of 6 months from the date of import.
Similarly, export obligation against import of items (covered by
chapter 9 of the ITC (HS) Classifications of Export & Import Items,
2004-09) shall be fulfilled within a period of 90 days from the date
of receipt of the first import consignment i.e. the date on which
the first import consignment is cleared by the Customs authorities.
- Goods already imported/shipped/arrived before the issue of LOP/
LOI are also eligible for duty free clearance under the
EOU/EHTP/STP/BTP scheme provided customs duty has not been paid and
the goods have not been cleared from Customs.
|
| Fax machines / laptop computers outside approved premises |
6.8.1 |
EOU/EHTP/STP/BTP units may install one fax machine at a place of its
choice, outside the premises of the unit, subject to intimation of its
location to the concerned Customs/Central Excise authorities. |
|
6.8.2 |
EOU/EHTP/STP/BTP units may, temporarily take out of the premises of
the unit duty free laptop computers and video projection systems for
working upon by authorized employees. |
|
6.8.3 |
EOU / EHTP / STP / BTP units may install personal computers not
exceeding two in number, imported/procured duty free in their
registered/administrative office subject to the guidelines issued by
Department of Revenue in this behalf. |
|
6.8.4 |
For IT and IT enabled services, persons authorized by the software
units may access the facility installed in the EOU/ EHTP/STP/BTP unit
through communication links. |
| Leasing of Capital Goods |
6.9 |
The value of imported capital goods financed through leasing
companies or obtained free of cost and/or on loan / lease basis shall
also be taken into account for the purpose of calculation of NFE as
defined in the Policy. |
| Net Foreign Exchange Earnings (NFE) |
6.10.1 |
EOU/EHTP/STP/BTP unit shall be a positive net foreign exchange
earner. Net Foreign Exchange Earnings (NFE) shall be calculated
cumulatively for a block of five years from the commencement of
production according to the formula given below. Items of manufacture
for export specified in the Letter of Permission (LOP)/ Letter of Intent
(LOI) alone shall be taken into account for calculation of NFE.
Positive NFE = A – B > 0
Where
NFE is Net Foreign Exchange Earning.
‘A’ is the FOB value of exports by the EOU/EHTP/STP/BTP unit; and ‘B’is
the sum total of the CIF value of all imported inputs and the CIF value
of all imported capital goods, and the value of all payments made in
foreign exchange by way of commission, royalty, fees, dividends,
interest on external borrowings/ high sea sales during the first five
year period or any other charges. “Inputs” mean raw materials,
intermediates, components, consumables, parts and packing materials. |
|
6.10.2 |
If any goods are obtained from another EOU / EHTP / STP / SEZ / BTP
unit, or procured from an international exhibition held in India, or
bonded warehouses or precious metals procured from nominated agencies
the value of such goods shall be included under B. |
|
6.10.3 |
If any capital goods imported duty free or leased from a leasing
company, received free of cost and/or on loan basis or transfer, the CIF
value of the capital goods shall be included pro-rata, under ‘B’ for the
period it remains with the units. |
|
6.10.4 |
For annual calculation of NFE the value of imported capital goods
and lumpsum payment of foreign technical know-how fee shall be amortized
as under:
1st – 10th year: 10% |
| Maintenance of accounts |
6.11.1 |
EOU/EHTP/STP/BTP unit shall maintain proper account, and shall file
digitally signed quarterly and annual report as prescribed in Annexure
to Appendix-14-IF to the Development Commissioner/ Designated Officer in
the Ministry of Information & Technology /Department of Bio-Technology
and Customs and Central Excise authorities. |
|
6.11.2 |
The unit shall be able to account for the entire quantity of each
category of homogenous goods imported / procured duty free, by way of
exports, sales/supplies in DTA or transfer to other SEZ/EOU/EHTP/STP/BTP
units and balance in stock. However, at no point of time the units shall
be required to co- relate every import consignment with its exports,
transfer to other SEZ/ EOU/ EHTP/STP/BTP units, sales in the DTA and
balance in stock. Any matter for clarification as to whether goods are
homogenous or not shall be decided by Units Approval Committee. |
| Monitoring of NFE |
6.12.1 |
The performance of EOU units shall be monitored by the Units
Approval Committee as per the guidelines given in Appendix –14-IG.
Performance of EHTP / STP / BTP shall be monitored by Ministry of
Information & Technology / Deptt. of Bio- technology jointly with the
jurisdictional Central Excise / Customs Authority. |
|
6.12.2 |
Failure to ensure positive NFE or to abide by any of the terms and
conditions of the LOP/LOI/IL/LUT shall render the unit liable to penal
action under the provisions of the Foreign Trade (Development &
Regulation) Act, 1992 and the Rules and Orders made there under without
prejudice to action under any other law/rules and cancellation or
revocation of LOP/ LOI/IL. |
| Conversion of Scrap / dust /sweeping of Gold/ silver/platinum into
standard Bars. |
6.13 |
Scrap/dust/sweeping of gold/silver/ platinum may be sent to the
Government of India Mint/Private Mint from the EOU/ EHTP/STP units and
returned to them in standard bars in accordance with the procedure
prescribed by the Customs authorities or may be permitted to be sold in
the DTA on payment of applicable customs duty, on the basis of
gold/silver/ platinum content, as may be notified by Customs
authorities. |
| DTA supplies |
6.14 |
Not withstanding the provision of DTA sales in Para 6.8 of Policy,
such DTA sales shall not affect the application to any goods of any
other prohibition or regulation affecting import thereof in force at the
time when such goods are imported. This also does not confer any
immunity, exemption or relaxation at any time from any commitment or
compliance with any requirements to which the importer may be subject to
under other laws or regulations. |
| Supplies to other EOU/ EHTP/STP/SEZ / BTP units |
6.15 |
Supplies to other EOU/SEZ/ EHTP/ STP/BTP units shall be counted
towards NFE provided that such goods are permissible for procurement by
these units. |
| Transfer of Power from one unit to another |
6.16 |
Transfer of power from Captive Power plants (DG Sets) from one unit
of EOU/EHTP/STP/BTP to another is permitted as prescribed in sector
specific condition in Appendix 14 IC. |
| Supply of precious/semiprecious/ Synthetic stones from DTA. |
6.17 |
Supplier of precious and semi-precious stones, synthetic stones and
processed pearls from DTA to EOUs shall be eligible for grant of
Replenishment Authorisation at the rates and for the items mentioned in
the Handbook (Vol.I). The procedure for submission of application for
grant of Replenishment Authorisation as contained in the relevant
Chapter of the Handbook (Vol-I) shall be applicable. However, the
application shall be made to the Development Commissioner concerned.
Such supplies to EOUs are not treated as deemed exports for the purpose
of any of the deemed export benefits. |
| Application for grant of entitlements |
6.18 |
Application for grant of all the entitlements may be made to the
Development Commissioner concerned. |
| Export through other exporter |
6.19 |
An EOU/EHTP/STP/BTP unit may export goods manufactured/software
developed by it through other exporter or any other EOU/ EHTP / STP /
SEZ/BTP unit subject to the condition that:
- Goods shall be produced in the EOU/EHTP/STP/BTP unit concerned.
- The level of NFE or any other conditions relating to the imports
and exports as prescribed shall continue to be discharged by the EOU
/ EHTP / STP unit concerned.
- The export orders so procured shall be executed within the
parameters of EOU/EHTP/STP/BTP schemes and the goods shall be
directly transferred from the unit to the port of shipment.
- Fulfillment of NFE by EOU/ EHTP/STP/BTP units in regard to such
exports shall be reckoned on the basis of the price at which the
goods are supplied by EOUs to other Exporter or other EOU/ EHTP/
STP/BTP/SEZ unit.
- All export entitlements, including recognition as Status Holder
would accrue to the exporter in whose name foreign exchange earnings
are realized. However, such export shall be counted towards
fulfillment of obligation under EOU/EHTP/STP/BTP scheme only.
|
| Other Entitlements |
6.20.1 |
The FOB value of export of an EOU/ EHTP / STP / BTP unit can be
clubbed with FOB value of exports of its parent company in the DTA or
vice versa for the purpose of according Star Export House status. |
|
6.20.2 |
Sectoral norms as notified by the Government shall apply to FDI in
service activities. |
|
6.20.3 |
Software units may also use the computer system for training
purpose(including commercial training) subject to the condition that no
computer terminal shall be installed outside the bonded premises for the
purpose. |
|
6.20.4 |
Export of iron ore shall be subject to the decision of the
Government from time to time. Requirements of other conditions of
exports like minimum export price/export in consumer pack etc. as per
ITC(HS) shall apply in case the raw materials are sourced from DTA and
exported without further processing/manufacturing by the EOU. Export of
textile items shall be covered by bilateral agreements. Wood based units
shall comply with the direction of Hon’ble Supreme Court contained in
its order dated 12.12.1996 in Writ (civil) No, 202 of 1995-
T.N.Godavarman Thirrumulppad v/s Union of India and others with
WP(Civil) no 171 of 1996 in regards to use of timber/other wood. |
| Sub-Contracting |
6.21.1 |
Sub-contracting by EOU gems and jewellery units through other EOUs
or SEZ Units or units in DTA shall be subject to following conditions:
- Goods, finished or semi finished, including studded jewellery,
taken out for sub- contractingshall be brought back to the unit
within 90 days.
- No cut and polished diamonds, precious and semiprecious stones
(except precious, semi-precious and synthetic stones having zero
duty) shall be allowed to be taken out for sub-contracting.
- Receive plain gold/silver/platinum jewellery from DTA/ EOU/SEZ
units in exchange of equivalent quantity of gold/silver/ platinum,
as the case may be, contained in the said jewellery.
- EOUs shall be eligible for wastage as applicable as per para
4A.2 of Handbook for sub-contracting and against exchange.
- The DTA unit undertaking job work or supplying jewellery against
exchange of gold/silver/platinum shall not be entitled to deemed
export benefits.
|
|
6.21.2 |
The facility of getting job work done from DTA unit will be
available even when the job worker is not registered with the Central
Excise Authority subject to the condition that the goods are brought
back to the premises of the Unit on completion of the job work. |
|
6.21.3 |
Export of finished goods from the job worker’s premises may be
permitted provided such premises are registered with the Central Excise
authorities. Where the job worker is SEZ/EOU/EHTP/STP/BTP unit, no such
excise registration is required and export may be effected either from
the job worker’s premises or from the premises of the unit. Export of
such products from the job worker’s premises shall not be allowed
through third parties as provided in the Policy. |
|
6.21.4 |
EOUs may be permitted to remove moulds, jigs, tools, fixtures,
tackles, instruments, hangers and patterns and drawings to the premises
of sub-contractors subject to the conditions that these shall be brought
back to the premises of the units on completion of the job work within a
stipulated period. The raw materials may or may not be sent along with
these goods. |
|
6.21.5 |
In case of sub-contracting of production process abroad, the goods
may be exported from the sub-contractor premises subject to the
conditions that job work charges shall be declared in the export
declaration forms, invoices etc. and full repatriation of foreign
exchange. |
| Contract farming |
6.22 |
EOUs engaged in production/processing of agriculture/
horticulture/aquaculture products, may on the basis of annual permission
from the Customs authorities take out inputs and equipments (specified
at Appendix-14- IJ) to the DTA farm subject to the following conditions:
- Supply of inputs by the EOUs to the contract farm(s) shall be
subject to the input-output norms approved by the DGFT/BOA.
- There shall be contract farming agreement between the EOU and
the DTA farmer(s).
- The unit engaged in export of agriculture/horticulture /
aquaculture products shall furnish bank guarantee equivalent to the
duty foregone on the capital goods/ inputs proposed to be taken out
to the Deputy /Assistant Commissioner of Customs /Central Excise.
|
| Export through Exhibitions/ Export Promotion tour |
6.23 |
EOU/EHTP/STP/BTP units may export goods for holding/ participating
in exhibitions abroad with the permission of Development Commissioner
subject to the following conditions:
- The unit shall produce to the Customs authorities the letter in
original or its certified copy containing approvalof the Development
Commissioner. For gems and jewellery items, a self certified
photograph of the products shall also be submitted.
- In case of re-import, such items, on arrival shall be verified
along with the export documents before clearance.
- Items not sold abroad shall be re-imported within 60 days of the
close of the exhibition. However, in case the exporter is
participating in more than one exhibition within 45 days of close of
the first exhibition, then the 60 days shall be counted from the
date of close of the last exhibition.
- In case of personal carriage of goods and for holding /
participating in overseas exhibitions, the value of such gems and
jewellery shall not exceed US $ 2 million.
|
| Personal Carriage of gems and jewellery for Export promotion tours |
6.24 |
Personal carriage of gold/silver/platinum jewellery, cut and
polished diamonds, precious, semi-precious stones, beads and articles as
samples upto US $ 100,000 for export promotion tours and temporary
display /sale abroad by EOUs is also permitted with the approval of the
Development Commissioner subject to the following conditions:
- EOU shall bring back the goods or repatriate the sale proceeds
within 45 days from the date of departure through normal banking
channel.
- The unit shall declare personal carriage of such samples to the
Customs while leaving the country and obtain necessary endorsement.
|
| Export through show-rooms abroad/duty free shops |
6.25 |
Export of goods is also permitted for display/sale in the permitted
shops set up abroad or in the showrooms of their distributors/agents.
The items not sold abroad within 180 days shall be re-imported within 45
days. |
| Sale through showrooms/ retail outlets at International Airports |
6.26 |
EOUs may set up showrooms/retail outlets at the International
Airports for sale of goods in accordance with the procedure laid down by
the Customs authorities. The items remaining unsold after a period of 60
days shall be exported or returned to the respective EOUs. |
| Personal carriage of Import / export Parcels including through
foreign bound passengers |
6.27.1 |
Import/ export through personal carriage of gem and jewellery items
may be under-taken as per the procedure prescribed by Customs. The
export proceeds shall, however, be realized through normal banking
channel. Import/export through personal carriage, other than gem and
jewellery units, shall be allowed provided the goods are not in
commercial quantity. |
|
6.27.2 |
For Personal carriage of jewellery by foreign bound passenger, the
following documents shall be submitted by EOU units as proof of exports.
- Copy of the shipping bill filed by the EOUs ;
- A copy of the Currency Declaration Form filed by the Foreign
buyer with the Customs at the time of his arrival; and
- Foreign Exchange Realisation/ Encashment Certificate from the
Bank.
|
|
6.27.3 |
In addition to this, Personal Carriage by foreign bound passenger on
Document Against Acceptance (DA)/Cash On Delivery (COD) basis is also
allowed. The EOUs will have to furnish the following documents as proof
of exports:
- Copy of Shipping Bill;
- Bank Certificate of Export and Realisation.
|
|
6.27.4 |
The procedure for personal carriage of import parcels will be the
same as for import of goods by airfreight except that the parcels shall
be brought to the Customs by the EOUs/ foreign national for examination
and release. Instructions issued by the Customs authorities in this
regard should be followed mutatis mutandis. |
|
6.27.5 |
Personal carriage of parts by foreign bound passengers shall be
allowed in case the same are required for repairs of exported goods at
customer site. The following documents should be submitted as proof of
exports:
- Permission letter from customs for exports.
- Invoice with value (for payment or free of charge).
|
| Replacement/ Repair of imported/ indigenous goods |
6.28.1 |
The units may send capital goods abroad for repair with the
permission of the Customs Authorities. Any foreign exchange payment for
this purpose will also be allowed. However, no permission will be
required for sending capital good for repair within the country. |
|
6.28.2 |
EOU/EHTP/STP/BTP units may, on the basis of records maintained by
them and prior intimation to Customs authorities:
- Transfer goods to DTA/abroad for repair/replacement, testing or
calibration and return.
- Transfer goods for quality testing/R&D purpose to any recognised
laboratory/ institution upto Rs.5 lakhs per annum without payment of
duty, on giving suitable undertaking to the Customs for return of
the goods. However, if the goods have been consumed/destroyed in the
process of testing etc. a certificate from the laboratory/
institution to this effect be furnished to the Customs.
|
| Samples |
6.29.1 |
EOU/EHTP/STP/BTP units may on the basis of records maintained by
them, and on prior intimation to Custom authority supply or sell samples
in the DTA for display/market promotion on payment of applicable duties. |
|
6.29.2 |
Remove samples without payment of duty, on furnishing a suitable
undertaking to Customs authorities for bringing back the samples within
a stipulated period. |
|
6.29.3 |
An EOU may export free samples, without any limit, including samples
made in wax moulds, silver mould and rubber moulds through all
permissible mode of export including through courier agencies/post. |
|
6.29.4 |
An EOU on the basis of records maintained by them and on prior
intimation to customs authorities may send samples to other EOUs for
display on returnable basis within a period of 30 days. |
| Donation of Computer and Computer peripherals |
6.30 |
EOU/EHTT/STP/BTP unit may be allowed by customs authorities
concerned to donate imported/ indigenously procured (bought or taken on
loan) computer and computer peripherals, including printer, plotter,
scanner, monitor, keyboard and storage units without payment of duty,
two years after their import/ procurement and use by the units, to a
school run by the Central Government, or Government of a State or, a
Union Territory or, a local body, an Educational Institution run on
non-commercial basis by any organization, a Registered Charitable
Hospital, a Public Library, a Public Funded Research and Development
Establishment , a Community Information Center run by the Central
Government or, Government of a State or, a Union Territory or local
body, an Adult Education Center run by the Central Government or,
Government of a State or, a Union Territory or a local body, or an
organization of the Central Government or, a Government of a State or, a
Union Territory as per Custom /Central Excise notification issued in
this regard. |
| Destruction of goods |
6.31 |
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 the Unit after
intimation to the Custom authorities or destroyed outside the Unit with
the permission of Customs authorities. Destruction as stated above shall
not apply to gold, silver, platinum, diamond, precious and semi precious
stones. |
| Distinct Identity |
6.32 |
If an industrial enterprise is operating both as a domestic unit as
well as an EOU/EHTP/STP/BTP unit, it shall have two distinct identities
with separate accounts, including separate bank accounts. It is,
however, not necessary for it to be a separate legal entity, but it
should be possible to distinguish the imports and exports or supplies
affected by the EOU/EHTP/ STP/BTP units from those made by the other
units of the enterprise. |
| Unit Approval Committee for EOUs |
6.33.1 |
The powers and functions of the Unit Approval Committee of EOUs
shall be as under:
- To consider applications for setting up EOUs other than
proposals for setting up of unit in the services sector (except R&D,
software and IT enabled services, or any other service activity as
may be delegated by the BOA). Items of manufacture requiring
industrial licence under the Industrial (Development & Regulation)
Act, 1951 shall be considered by the BOA.
- to consider and permit conversion of units in SEZ to EOU;
- to monitor the performance of the Units;
- to supervise and monitor permission, clearances, licences
granted to the units and take appropriate action in accordance with
law;
- to call for information required to monitor the performance of
the unit under the permission, clearances, licenses granted to it;
- to perform any other function delegated by the Central
Government or its agencies;
- to perform any other function as may be delegated by the State
Governments or its agencies; and
- to grant all approvals and clearances for the establishment and
operation of EOUs.
|
| Approval of EHTP/ STP/ BTP units |
6.33.2 |
In the case of units under EHTP/STP scheme, necessary
approval/permission shall be granted by the officer designated by the
Ministry of Communication and Information Technology, Department of
Information Technology / Director (STPI). The designated officer shall
also exercise powers of adjudication under section 13 read with section
11 of Foreign Trade (Development & Regulation) Act, 1992 in respect of
STP/EHTP as mentioned in Gazette Notification No. S.O. 106 (E) dated
30-1-2006. Similarly in case of units under BTP, necessary
approval/permission shall be granted by the officer designated by the
Department of Bio-Technology. However, the designated officers shall
adopt the criteria for automatic approval of new units as laid down in
Appendix 14-IB. |
| Administration of EOUs / Power of DC/ Designated Officer |
6.34 |
The Development Commissioner/Designated Officer shall have the
following powers in respect to the units. Jurisdiction of Development
Commissioners is given in Appendix- 14-IK.
- Conversion of sick/closed DTA unit into EOU;
- Conversion of EOU to STP/EHTP/BTP and vice-versa as per the
prescribed procedure;
- To allow increase in the value of capital goods in terms of
Indian Rupees, on account of foreign exchange rate fluctuations;
- To permit capacity enhancement without any limit in case of
de-licensed industries only;
- Permit broad-banding for similar goods and activities mentioned
in the LOP or to provide for backward or forward linkages to the
existing line of manufacture;
- Authorize change in name of the company or the implementing
agency and change from a company to another provided the new
implementing agency/ company undertakes to take over the assets and
liabilities of the existing unit;
- Permit change of location from the place mentioned in the LOP to
another and/or include additional location provided that no change
in other terms and conditions of the approval is envisaged and that
the new location is within the territorial jurisdiction of the
Development Commissioner/Designated Officer;
- Extend validity period of LOP by three years beyond the initial
validity period of the LOP (except in case where there is a
restriction on initial period of approval, like setting up of oil
refinery projects) ;
- Cancel LOP wherever warranted;.
- Permit merger of two or more units into one unit provided the
units fall within the jurisdiction of the same Development
Commissioner/Designated Officer subject to the conditions that the
activities are covered under the provision of broad banding;
- Exercise powers of adjudication under Section 13 read with
Section 11 of Foreign Trade (Development & Regulation) Act, 1992 in
respect of EOUs as mentioned in Gazette Notification No. SO. 194(E)
dated 6.3.2000;
- Do valuation of exports declared on SOFTEX form by EOUs as per
RBI A.D. (M.A Series) Circular AP (DIR series Circular No.9 dated
25.10.2001);
- Issue eligibility certificates for grant of employment visa to
low level foreign technicians to be engaged by EOUs as per Ministry
of Home Affairs’ letter No. 25022/7/99- F.1 dated 20.9.1999;
|
| Registration-cum-Membership Certificate |
|
- Function as a Registering authority for EOU/ EHTP/STP /BTP. A
separate Registration cum- Membership Certificate shall not be
required in their cases as provided for in paragraph 2.44 of the
Policy except in case of spices. In case of spices, it would be
mandatory for the units to get themselves registered with the Spices
Board also.
|
| Importer Exporter Code No. |
|
- Allot Importer-Exporter Code number for EOUs, if the same has
already not been allotted to the entity;
|
| Green Card |
|
- Issue of Green Card automatically after execution of Legal
Undertaking;
- Grant/renewal of Status Certificate in respect of EOUs provided
it does not involve clubbing of FOB value of exports of its parent
company in the DTA;
- Publicity of EOU/EHTP/STP/BTP Scheme under their jurisdiction.
|
| Clearance of Capital Goods in DTA |
6.35 |
Clearance of Capital Goods including second hand in DTA shall be
allowed as per the Policy under EPCG Scheme. In other cases, clearance
in DTA may be allowed on payment of applicable duty and Import Policy in
force on the date of such clearance. |
| Depreciation norms |
6.36.1 |
Depreciation upto 100% is permissible for Computers and Computer
peripherals in 5 years and 10 years in case of other items. |
| Depreciation norms for Computers and Computer peripherals |
6.36.2 |
Depreciation for computers and computer peripherals shall be as
follows:
10% for every quarter in the first year;
8% for every quarter in the second year;
5% for every quarter in the third year;
1% for every quarter in the fourth and fifth year; |
| Depreciation norms for other Capital goods |
6.36.3 |
For capital goods, other than the above, the depreciation rate would
be as follows:-
4% for every quarter in the first year;
3% for every quarter in the second and third year; and
2.5% for every quarter in the fourth and fifth year.
2% for every quarter thereafter. |
| Conversion |
6.37.1 |
Existing DTA units, may also apply for conversion into an
EOU/EHTP/STP/BTP unit, but no concession in duties and taxes would be
available under the scheme for plant, machinery and equipment already
installed. On conversion, they would get Income Tax concessions but
limited to the period of 10 year from original commencement of
manufacture or that prescribed under Section 10 of Income Tax Act
whichever is earlier. For this purpose, the DTA unit may apply to the
Development Commissioner / Designated Officer concerned in the same
manner as applicable to new units. In case there is an outstanding
export commitment under the EPCG scheme, it will be subsumed in the
export performance of the unit. If the unit is having outstanding export
commitment under the Advance Authorisation Scheme, it will apply to the
Norms Committee for reducing its export commitment in proportion to the
quantum of duty free material actually utilised for production and
permitted to carry forward the unutilized material imported against the
Advance Authorisation, if any, under the EOU/EHTP/ STP/BTP scheme. |
|
6.37.2 |
The existing EHTP/STP/BTP units may also apply for conversion/merger
to EOU unit and vice-versa. In such cases, the units will continue to
avail the permissible exemption in duties and taxes as applicable under
the relevant scheme. EHTP/STP/BTP units desiring conversion as an EOU
may apply to the Development Commissioner concerned through the Officer
designated by the Department of Information Technology/Department of
Bio-Technology in the same manner as applicable to new units. Likewise
EOU desiring conversion into EHTP/STP/BTP may apply to the officer
designated by the Department of Information Technology / Department of
Bio-Technology through the Development Commissioner concerned. |
|
6.37.3 |
An EOU may be shifted to SEZ with the approval of Development
Commissioner provided the EOU unit has achieved pro-rata obligation
under the EOU scheme. |
| Revival of Sick units |
6.38 |
Subject to a unit being declared sick by the appropriate authority,
proposals for revival of the unit or its take over may be considered by
the Board of Approval. Guidelines on revival of sick units are given in
Appendix -14-IM. |