| Scheme |
6.1 |
Policy relating to EOUs, EHTPs, STPs and BTPs Schemes is given in
Chapter 6 of FTP. |
Applications /
Approval / Renewal
of approval |
6.2.1 |
For setting up an EOU, three copies of application as in Appendix
14-I-A may be submitted to DC. |
| |
6.2.2 |
Applications for setting up units under EOU scheme other than
proposals for setting up of unit in service 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 Units Approval
Committee within 15 days, as per criteria indicated in Appendix 14-I-B
and sector specific conditions relating to approval as in Appendix
14-I-C. In other cases, approval may be granted by DC after clearance by
BoA. |
|
6.2.3 |
Proposals for setting up EOU requiring industrial licence may be
granted approval by DC after clearance of proposal by BoA (as per
Appendix 14-I-D) and Department of Industrial Policy and Promotion
within 45 days on merits. |
| |
6.2.4 |
STP / EHTP complexes can be set up by Central Government, State
Government, Public or Private Sector Undertakings or any combination
thereof, duly approved by Inter-Ministerial Standing Committee (IMSC) in
Ministry of Communication and Information Technology (Department of
Information Technology - DoIT). Application for setting up EHTP / STP
unit shall be in format prescribed by DoIT and shall be submitted to
officer designated by DoIT. |
| |
6.2.5 |
BTP can be set up by Central Government, State Government, Public or
Private Sector Undertakings or any combination thereof. Application for
setting up of BTP shall be submitted to Department of Bio-Technology (DoBT)
and such applications which meet guidelines prescribed by DoBT will be
approved and recommended to DGFT for notification. Application for
setting up of BTP unit shall be submitted to officer designated by DoBT. |
| |
6.2.6 |
LoP / LoI shall specify item(s) of manufacture / service activity,
annual capacity, projected annual export for first five years in dollar
terms, Net Foreign Exchange (NFE) earnings, limitations, if any,
regarding sale of finished goods, by-products and rejects in DTA and
such other matter as may be necessary and also impose such conditions as
may be required. |
| |
6.2.7 |
LoP/LoI issued to EOU / EHTP / STP / BTP units by concerned
authority would be construed as an authorization for all purposes.
Standard format for LoP for EOU is given in Appendix 14- I-E. |
| |
6.2.8 |
EOUs shall have separate earmarked premises for separate LoP.
Similarly, EOUs may be approved on leased premises provided 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 date of LUT and DC shall satisfy
himself of genuine nature of lease. |
| |
6.2.9 |
On completion of approval period as provided for in para 6.6 of FTP,
it shall be open to unit to continue under scheme or opt out of scheme.
Where unit opts to continue, DC will extend approval period. If no
intimation in this regard is received from unit within a period of six
months of expiry of approval period, DC will take action, suo moto, to
cancel approval under EOU scheme and take further action in this regard.
Where units give their option to continue after expiry of six months as
stipulated above, DC will grant extension after obtaining approval of BoA. |
| Legal Undertaking(LUT) |
6.3.1 |
Approved EOU / EHTP / STP / BTP unit shall execute an LUT with DC /
Designated Officer concerned as in Appendix 14- I-F. |
|
6.3.2 |
All EOU / EHTP / STP / BTP units should have permanent email
address. No LUT for new units shall be executed unless unit has its
permanent e-mail address and digital signature on said e-mail ID. In
event of an EOU not having permanent email address and digital
signature, further imports and DTA sale shall not be permitted by DC. |
| Export of goods and services |
6.4.1 |
Software units may undertake exports using data communication links
or in form of physical exports (which may be through courier service
also), including export of professional services. |
|
6.4.2 |
EOUs shall be permitted to export jewellery on basis of a notional
rate certificate issued by nominated agency. This rate will be based on
prevailing Gold / US$ rate and US$ / INR rate in notional rate
certificate. Certificate issued by nominated agency should not be older
than 7 working days of date of shipment. |
|
6.4.3 |
Exporter shall have flexibility to fix price and repay gold loan
within 180 days from date of export. Price shall be communicated to
nominated agencies who will issue a certificate showing final
confirmation of rate to bank negotiating document, to ensure export
proceeds are realized at this rate. |
|
6.4.4 |
Gems & 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 value of
imported or indigenously procured goods to DTA against valid Gems &
Jewellery REP as applicable on payment of appropriate duty is also
permitted. |
Import / Domestic
Procurement of Goods |
6.5.1 |
Goods permitted to be imported / procured from DTA shall include:
(a) Raw materials, components, consumables,intermediates, spares and
packing materials;
(b) Capital goods, whether new or second-hand, including inter-alia
following and their spares:
(i) DG sets, captive power plants, transformers and accessories for all
above.
(ii) Pollution control equipment.
(iii) Quality assurance equipment.
(iv) Material handling equipment, like fork lifts and overhead cranes,
mobile cranes, crawler cranes, hoists and stackers.
(v) 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.
(vi) Security Systems.
(vii) Tools, jigs, fixtures, gauges, moulds, dyes, instruments and
accessories.
(c) Raw materials for making capital goods for use within unit.
(d) Others including:
(i) Prototypes and technical samples for existing product(s) and product
diversification
development or evaluation.
(ii) Drawings, blue prints, charts, microfilms and technical data.
(iii) Office equipment, including PABX, Fax machines, projection system,
Computers,
Laptop and Server.
(e) Spares and consumables for above items.
(f) Any other items not mentioned above with approval of BoA. |
|
6.5.2 |
EOUs may import plain / studded gold / platinum or
silver jewellery for export after repairs / remaking. |
| Conditions of Import |
6.6 |
Import of goods by EOU / EHTP / STP / BTP units shall be subject to
following conditions:
(a) Goods shall be imported into EOU / EHTP / STP / BTP premises. However,
agriculture and allied sectors and granite sector units in EOU may supply /
transfer capital goods and inputs in farm / fields / quarries with prior
intimation to jurisdictional Customs / Central Excise authorities, provided
ownership of goods rests with EOUs. Granite sector would also be allowed to take
spares upto 5% of value of Capital Goods to quarry site.
(b) Procedure as prescribed under Customs / Central Excise rules for EOUs and
units in EHTP / STP / BTP will be followed and appropriate bond executed with
Customs / Central Excise authorities.
(c) Goods, except capital goods and spares, shall be utilized 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 date of import.
Similarly, export obligation against import of items {covered by Chapter 9 of
ITC(HS)} and coconut oil shall be fulfilled within a period of 90 days from the
date on which first import consignment is cleared by Customs Authorities.However,
in case of import of spices for VA purpose like crushing / grinding /
sterilization or for manufacture of oils and oleoresins of pepper, cardamom and
chillies (and not for simple cleaning, grading, re-packing etc.), EO shall be
fulfilled within 120 days from the date of importation of first consignment.
However, for imports completed up to 31.12.2008, export obligation period shall
be 150 days from the date of clearance. In case of import of spices
(other than pepper, cardamom and chillies) for manufacture of spice oils and
oleoresins, EO shall be fulfilled within 12 months.
(d) Goods already imported / shipped / arrived before issue of LoP / LoI are
also eligible for duty free clearance under EOU / EHTP / STP / BTP scheme,
provided customs duty has not been paid and goods have not been cleared from
Customs.
(e) Consumption of inputs by the EOU / EHTP / STP / BTP unit shall be based on
the Standard Input Output Norms (SION) provided that:
(i) where no SION have been notified, generation of waste, scrap and remnants
upto 2% of input quantity shall be allowed;
(ii) where additional items other than those given in SION are required as
inputs or where generation of waste, scrap and remnants is beyond 2% of input
quantity, use of such inputs shall be allowed by the jurisdictional DC within a
period of three months from the date of and based on self declared norms, with
the unit undertaking to adjust self-declared / ad hoc norms in accordance with
norms as finally fixed by Norms Committee in DGFT;
(iii) in case of any difficulty in fixation of SION as above, BoA in
consultation with Norms Committee in DGFT, will decide on a case to case basis. |
| Fax machines/laptop computers outside approved premises |
6.7.1 |
EOU / EHTP / STP / BTP units may install one fax machine at a place of its
choice, outside premises of unit, subject to intimation of its location to
concerned Customs / Central Excise authorities. |
|
6.7.2 |
EOU / EHTP / STP / BTP units may, temporarily take out of premises of unit,
duty free laptop computers and video projection systems for working upon by
authorized employees. |
|
6.7.3 |
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 DoR guidelines. |
|
6.7.4 |
For IT and IT enabled services, persons authorized by software units may
access facility installed in EOU / EHTP / STP / BTP unit through communication
links. |
| Leasing of Capital Goods |
6.8 |
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 purpose of calculation of NFE as defined in FTP. |
| Net Foreign Exchange (NFE) Earnings |
6.9.1 |
EOU / EHTP / STP / BTP unit shall be a positive net foreign exchange earner.
NFE earnings shall be calculated cumulatively in the block period as per para
6.5 of FTP, according to the formula given below. Items of manufacture for
export specified in LoP / LoI alone shall be taken into account for calculation
of NFE.
Positive NFE = A – B> 0
Where
‘NFE’ is Net Foreign Exchange;
‘A’ is FOB value of exports by EOU / EHTP / STP / BTP unit;
‘B’ is sum total of CIF value of all imported inputs and CIF value of all
imported capital goods, and value of all payments made in foreign exchange by
way of commission, royalty, fees, dividends, interest on external borrowings /
high sea sales during first five year period or any other charges. It will also
include payment made in Indian Rupees on high sea sales. “Inputs” mean raw
materials, intermediates, components, consumables, parts and packing materials. |
|
6.9.2 |
If any goods are obtained from another EOU / EHTP / STP / BTP / SEZ unit, or
procured from an international exhibition held in India, or bonded warehouses or
precious metals
procured from nominated agencies, value of such goods shall be included under
‘B’. |
|
6.9.3 |
If any capital goods are imported duty free or leased from a leasing
company, received free of cost and / or on loan basis or transfer, CIF value of
capital goods shall be included prorata, under ‘B’ for period it remains with
units. |
|
6.9.4 |
For annual calculation of NFE, value of imported capital goods and lump sum
payment of foreign technical know-how fee shall be amortized as under:
1st – 10th year : 10%
Provided that above amortization rates would be applicable only if an
undertaking is given by a unit that it will not exit to DTA in the first 10
years. For existing units, proportionate Customs and excise duty must be paid
where NFE is less than depreciation already claimed, before exit. |
Maintenance of
accounts |
6.10.1 |
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-I-F to DC /Designated Officer in DoIT / DoBT and Customs and Central
Excise authorities. |
| |
6.10.2 |
Unit shall be able to account for 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, units shall be required to
correlate every import consignment with its exports, transfer to other SEZ / EOU
/ EHTP /STP / BTP units, sales in 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 |
6.11 |
Performance of EOUs shall be monitored by Units Approval Committee as per
guidelines given in Appendix 14-I-G.Performance of EHTP / STP / BTP shall be
monitored by DoIT / DoBT jointly with jurisdictional Central Excise / Customs
authority. |
| Conversion of Scrap / dust / sweeping of gold silver / platinum into
Standard Bars |
6.12 |
Scrap / dust / sweeping of gold / silver / platinum may be sent to
Government of India Mint / private mint from EOU / EHTP / STP units and returned
to them in standard bars in accordance with procedure prescribed by Customs
authorities, or may be permitted to be sold in DTA on payment of applicable
customs duty, on basis of gold / silver / platinum content, as may be notified
by Customs authorities. |
| DTA supplies |
6.13 |
Notwithstanding provision of DTA sales in para 6.8 of FTP,such DTA sales
shall not affect 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 importer
may be subject to under other laws or regulations. |
Supplies to other
EOU / EHTP / STP /
SEZ /BTP units |
6.14 |
Supplies to other EOU / EHTP / STP / BTP / SEZ 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 one unit |
6.15 |
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-I-C. |
| Supply of precious /semiprecious / Synthetic stones from DTA |
6.16 |
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 rates and for items mentioned in HBP v1. Procedure for
submission of application for grant of Replenishment Authorisation as contained
in relevant Chapter of HBP v1 shall be applicable. However, application shall be
made to DC concerned. Such supplies to EOUs are not treated as deemed exports
for purpose of any of deemed export benefits. |
| Application for grant of entitlements |
6.17 |
Application for grant of all entitlements may be made to DC concerned. |
| Export through other exporters |
6.18 |
An EOU / EHTP / STP / BTP unit may export goods manufactured / software
developed by it through other exporter, or any other EOU / EHTP / STP / BTP /
SEZ unit subject to condition that:
(a) Goods shall be produced in EOU / EHTP / STP / BTP unit concerned.
(b) Level of NFE or any other conditions relating to imports and exports as
prescribed shall continue to be discharged by EOU / EHTP / STP / BTP unit
concerned.
(c) Export orders so procured shall be executed within parameters of EOU / EHTP
/ STP / BTP schemes and goods shall be directly transferred from unit to port of
shipment.
(d) Fulfillment of NFE by EOU / EHTP / STP / BTP unitsin regard to such exports
shall be reckoned on basis of price at which goods are supplied by EOUs to other
exporter or other EOU / EHTP / STP / BTP / SEZ unit.
(e) All export entitlements, including recognition as Status Holder would accrue
to 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. |
| Others Entitlements |
6.19.1 |
FOB value of export of an EOU / EHTP / STP / BTP unit can be clubbed with
FOB value of exports of its parent company in DTA or vice versa for the purpose
of according Export House and Trading House status. |
|
6.19.2 |
Sectoral norms as notified by Government shall apply to FDI in service
activities. |
|
6.19.3 |
Software units may also use computer system for training purpose (including
commercial training), subject to condition that no computer terminal shall be
installed outside bonded premises for this purpose. |
|
6.19.4 |
Export of iron ore shall be subject to decision of Government. Requirements
of other conditions of exports like minimum export price / export in consumer
pack etc. as per ITC(HS) shall apply in case raw materials are sourced from DTA
and exported without further processing / manufacturing by EOU. Export of
textile items shall be covered by bilateral agreements. Wood based units shall
comply with direction of 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 regard to use of timber /
other wood. |
| Sub-Contracting |
6.20.1 |
Sub-contracting by EOU gems and jewellery units through other EOUs, or SEZ
units, or units in DTA shall be subject to following conditions:-
(a) Goods, finished or semi finished, including studded jewellery, taken out for
sub- contracting shall be brought back to unit within 90 days.
(b) 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.
(c) 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 said jewellery.
(d) EOUs shall be eligible for wastage as applicable as per para 4A.2 of HBP v1
for sub-contracting and against exchange.
(e) DTA unit undertaking job work or supplying jewellery against exchange of
gold / silver / platinum shall not be entitled to deemed export benefits. |
|
6.20.2 |
Facility of getting job work done from DTA unit will be available even when
job worker is not registered with Central Excise authority, subject to condition
that goods are brought back to premises of unit on completion of job work. |
|
6.20.3 |
Export of finished goods from job worker’s premises may be permitted,
provided such premises are registered with Central Excise authorities. Where job
worker is SEZ / EOU / EHTP / STP / BTP unit, no such excise registration is
required and export may be effected either from job worker’s premises or from
premises of unit. Export of such products from job worker’s premises shall not
be allowed through third parties as provided in FTP. |
|
6.20.4 |
EOUs may be permitted to remove moulds, jigs, tools, fixtures, tackles,
instruments, hangers and patterns and drawings to premises of sub-contractors,
subject to condition that these shall be brought back to premises of units on
completion of job work within a stipulated period. Raw materials may or may not
be sent along with these goods. |
|
6.20.5 |
In case of sub-contracting of production process abroad, goods may be
exported from sub-contractor premises subject to conditions that at the time of
clearance of goods, the EOU / EHTP / BTP / STP unit shall declare (i) the
transaction value of the finished goods to be cleared from the sub-contractor’s
premises abroad; (ii) job work charges to be paid to the subcontractor abroad;
and (iii) value of intermediate goods; supported with documents like (a) sale
price contract / or invoice for the finished goods, (b) job work contract and
(c) the basis of arriving at the value of intermediate goods. The EOU / EHTP /
BTP / STP unit shall also ensure full repatriation of foreign exchange declared
as the transaction value of the finished goods cleared from the sub-contractor’s
premises abroad. |
| Contract Farming |
6.21 |
EOUs engaged in production / processing of agriculture /horticulture /
aquaculture products may, on basis of annual permission from Customs
authorities, take out inputs and equipments (specified in Appendix 14-I-J) to
DTA farm subject to following conditions:-
(a) Supply of inputs by EOUs to contract farm(s) shall be subject to
input-output norms approved by DGFT / BoA.
(b) There shall be contract farming agreement between EOU and DTA farmer(s).
(c) Unit has been in existence for at least two years and engaged in export of
agriculture / horticulture / aquaculture products; otherwise it shall furnish
bank guarantee equivalent to duty foregone on capital goods / inputs proposed to
be taken out, to Deputy / Assistant
Commissioner of Customs / Central Excise, till unit completes two years. |
| Export through Exhibitions / Export Promotion tour |
6.22 |
EOU / EHTP / STP / BTP units may export goods for holding / participating in
exhibitions abroad, with permission of DC, subject to following conditions:-
(a) Unit shall produce to Customs authorities letter in original, or its
certified copy containing approval of DC. For gems and jewellery items, a self
certified photograph of products shall also be submitted.
(b) In case of re-import, such items, on arrival shall be verified along with
export documents before clearance.
(c) Items not sold abroad shall be re-imported within 60 days of close of
exhibition. However, in case exporter is participating in more than one
exhibition within 45 days of close of first exhibition, then 60 days shall be
counted from date of close of last exhibition. In case of exhibition in USA, the
time period shall be 90 days instead of 60 days mentioned above.
(d) In case of personal carriage of goods and for holding / participating in
overseas exhibitions, value of such gems and jewellery shall not exceed US $ 5
million. |
| Personal Carriage of
gems and jewellery for export promotion tours |
6.23 |
Personal carriage of gold / silver / platinum jewellery, cut and polished
diamonds, precious, semi-precious stones, beads and articles as samples upto US
$ 1 million for export promotion tours, and temporary display / sale abroad by
EOUs, is also permitted with approval of DC subject to following conditions:-
(a) EOU shall bring back goods or repatriate sale proceeds within 45 days from
date of departure through normal banking channel.
(b) Unit shall declare personal carriage of such samples to Customs while
leaving country and obtain necessary endorsement. |
| Export through show rooms abroad/duty free shops |
6.24 |
Export of goods is also permitted for display / sale in permitted shops set
up abroad or in showrooms of their distributors agents. Items not sold abroad
within 180 days shall be re-imported within 45 days. |
Sale through
showrooms / retail
outlets at International
Airports |
6.25 |
EOUs may set up showrooms / retail outlets at International Airports for
sale of goods in accordance with procedure laid down by Customs authorities.
Items remaining unsold after a period of 60 days shall be exported or returned
to respective EOUs. |
Personal carriage of
Import / export Parcels
including through
foreign bound passengers |
6.26.1 |
For Personal carriage of jewellery by foreign bound passenger, following
documents shall be submitted by EOUs as proof of exports:
(a) Copy of shipping bill filed by EOUs;
(b) A copy of Currency Declaration Form filed by Foreign buyer with Customs at
time of his arrival; and
(c) Foreign Exchange Realisation / Encashment Certificate
from Bank. |
|
6.26.2 |
In addition to this, Personal Carriage by foreign bound passenger on
Document Against Acceptance (DA) / Cash On Delivery (COD) basis is also allowed.
EOUs will have to furnish following documents as proof of exports:-
(a) Copy of Shipping Bill;
(b) Bank Certificate of Export and Realisation. |
|
6.26.3 |
Procedure for personal carriage of import parcels will be same as for import
of goods by airfreight except that parcels shall be brought to Customs by EOUs /
foreign national for examination and release. Instructions issued by Customs
authorities in this regard should be followed mutatis mutandis. |
|
6.26.4 |
Personal carriage of parts by foreign bound passengers shall be allowed in
case same are required for repairs of exported goods at customer site. Following
documents should be submitted as proof of exports:-
(a) Permission letter from Customs for exports.
(b) Invoice with value (for payment or free of charge). |
|
| Replacement /Repair of imported / indigenous goods |
6.27.1 |
Units may send capital goods abroad for repair with permission of Customs
authorities. Any foreign exchange payment for this purpose will also be allowed.
However, no permission will be required for sending capital goods for repair
within country. |
|
6.27.2 |
EOU / EHTP / STP / BTP units may, on basis of records maintained by them and
prior intimation to Customs authorities:-
(a) Transfer goods to DTA / abroad for repair / replacement, testing or
calibration and return.
(b) 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 Customs for return of goods. However, if goods
have been consumed / destroyed in process of testing etc. a certificate from
laboratory / institution to this effect be furnished to Customs. |
| Samples |
6.28.1 |
EOU / EHTP / STP / BTP units may on basis of records maintained by them, and
on prior intimation to Customs authority, supply or sell samples in DTA for
display / market promotion on payment of applicable duties. |
|
|
6.28.2 |
Remove samples without payment of duty, on furnishing a suitable undertaking
to Customs authorities for bringing back samples within a stipulated period. |
| |
6.28.3 |
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. For statutory requirement of
Stability & Retention sample with manufacturer, an EOU / EHTP / BTP / STP unit
may re-import without payment of duty, those samples, which were exported by it,
under intimation to Custom Authorities, and FOB value of such samples shall not
be counted for NFE purpose and other export benefits, if any. |
|
6.28.4 |
An EOU, on 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 |
6.29 |
EOU / EHTP / 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 units, to a school run by 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 Central Government or,
Government of a State or, a Union Territory or local body; an Adult Education
Center run by Central Government or, Government of a State or, a Union Territory
or a local body; or an
organization of Central Government or, a Government of a State or, a Union
Territory as per Customs / Central Excise notification. |
| Distinct Identity |
6.30 |
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 imports and exports or supplies effected by EOU / EHTP / STP / BTP
units from those made by other units of enterprise. |
| Unit Approval Committee of EOUs |
6.31 |
Composition of Unit Approval Committee shall be as under:
Development Commissioner
Chairperson
Jurisdictional Commissioner of
Member
Central Excise & Customs or nominee
Joint DGFT or nominee
Member
Joint/Deputy Development
Member
Commissioner of the Zone
Any other nominee of any Department/Agency as special
invitee |
| |
6.31.1 |
Powers and functions of Unit Approval Committee of EOUs shall be as under:-
(a) To consider applications for setting up EOUs other than proposals for
setting up of unit in services sector (except R&D, software and IT enabled
services, or any other
service activity as may be delegated by BoA). Items of manufacture requiring
industrial licence under Industrial (Development & Regulation) Act, 1951 shall
be considered by BoA.
(b) to consider and permit conversion of units in SEZ to EOU;
(c) to monitor performance of units;
(d) to supervise and monitor permission, clearances,licences granted to units
and take appropriate action in accordance with law;
(e) to call for information required to monitor performance of unit under
permission, clearances, licenses granted to it;
(f) to perform any other function delegated by Central Government or its
agencies;
(g) to perform any other function as may be delegated by State Governments or
its agencies; and
(h) to grant all approvals and clearances for establishment and operation of
EOUs. |
| Approval of EHTP / STP / BTP units |
6.31.2 |
In case of units under EHTP / STP scheme, necessary approval / permission
shall be granted by officer designated by DoIT/ Director (STPI). Designated
officer shall also exercise powers of adjudication under Section 13 read with
Section 11 of FT (D&R) 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 officer
designated by DoBT. However, designated officers shall adopt criteria for
automatic approval of new units as laid down in Appendix 14-I-B. |
| Administration of EOUs / Power of DC /Designated Officer |
6.32 |
DC / Designated Officer shall have following powers in respect to units.
Jurisdiction of DC is given in Appendix 14-I-K.
(1) Conversion of sick / closed DTA unit into EOU;
(2) Conversion of EOU to STP / EHTP / BTP and vice-versa as per prescribed
procedure;
(3) To allow increase in value of capital goods in terms of Indian Rupees, on
account of foreign exchange rate fluctuations;
(4) To permit capacity enhancement without any limit in case of de-licensed
industries only;
(5) Permit broad-banding for similar goods and activities mentioned in LoP or to
provide for backward or forward linkages to existing line of manufacture;
(6) Authorize change in name of company or implementing agency and change from a
company to another provided new implementing agency / company undertakes to take
over assets and liabilities of existing unit;
(7) Permit change of location from place mentioned in LoP to another and / or
include additional location provided that no change in other terms and
conditions of approval is envisaged and that new location is within territorial
jurisdiction of DC / Designated Officer;
(8) Extend validity period of LoP by three years beyond initial validity period
of LoP (except in case where there is a restriction on initial period of
approval, like setting up of oil refinery projects);
(9) Cancel LoP wherever warranted; (10) Permit merger of two or more units into
one unit provided units fall within jurisdiction of same DC / Designated Officer
subject to condition that activities are covered under provision of broad
banding;
(11) Exercise powers of adjudication under Section 13 read with Section 11 of FT
(D&R) Act, in respect of EOUs as mentioned in Gazette Notification No. SO.
194(E) dated 6.3.2000;
(12) 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);
(13) 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 |
(14) |
Function as a Registering authority for EOU / EHTP / STP / BTP unit. A
separate Registration cum- Membership Certificate shall not be required in their
cases as provided for in paragraph 2.44 of FTP except in case of spices. In case
of spices, it would be
mandatory for units to get themselves registered with Spices Board also. |
| Importer Exporter Code No. |
(15) |
Allot Importer-Exporter Code number for EOUs, if same has already not been
allotted to entity; |
| Green Card |
(16) |
Issue of Green Card automatically after execution of LUT; |
|
(17) |
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 DTA; |
|
(18) |
Publicity of EOU / EHTP / STP / BTP Scheme under their jurisdiction. |
| Change of location / inclusion of additional
location with BoA approval |
6.33 |
BoA may consider change of location of EOU / EHTP / STP / BTP unit from
place mentioned in LoP to another and / or to include additional location
outside territorial jurisdiction of original DC / Designated Officer, subject to
such conditions as BoA may decide. |
|
| Clearance of Capital Goods in DTA |
6.34 |
Clearance of capital goods, including second hand, in DTA shall be allowed
as per FTP on payment of applicable duty and import policy in force on date of
such clearance. |
| Depreciation norms |
6.35.1 |
Depreciation up to 100% is permissible for Computers and Computer
peripherals in 5 years and 10 years in case of other items. |
| Depreciation norms for Computer and
Computer peripherals |
6.35.2 |
Depreciation for computers and computer peripherals shall be as follows:-
10% for every quarter in first year;
8% for every quarter in second year;
5% for every quarter in third year;
1% for every quarter in fourth and fifth year. |
| Depreciation norms for other Capital goods |
6.35.3 |
For capital goods, other than above, depreciation rate would be as follows:
4% for every quarter in first year;
3% for every quarter in second and third year;
2.5% for every quarter in fourth and fifth year;
2% for every quarter thereafter. |
| Conversion |
6.36.1 |
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 scheme
for plant, machinery and equipment already installed. On conversion, they would
get Income Tax concessions but limited to period of 10 years from original
commencement of manufacture or that prescribed under Section 10 of Income Tax
Act whichever is earlier. For this purpose, DTA unit may apply to DC /
Designated Officer concerned in same manner as applicable to new units. In case
there is an outstanding export commitment under EPCG scheme / Advance
Authorization Scheme, it will follow the procedure laid down in Appendix 14-I-O
of HBP v1. |
|
|
6.36.2 |
Existing EHTP / STP / BTP units may also apply for conversion/ merger to EOU
and vice-versa. In such cases, units will continue to avail permissible
exemption in duties and taxes as applicable under relevant scheme. EHTP / STP /
BTP units desiring conversion as an EOU may apply to DC concerned through
Officer designated by DoIT / DoBT in same manner as applicable to new units.
Likewise, EOU desiring conversion into EHTP / STP / BTP may apply to officer
designated by DoIT / DoBT through DC concerned. |
|
|
6.36.3 |
An EOU may be shifted to SEZ with approval of DC provided EOU has achieved
pro-rata obligation under EOU scheme. |
| Revival of Sick units |
6.37 |
Subject to a unit being declared sick by appropriate authority,proposals for
revival of unit or its take over may be considered by BoA. Guidelines on revival
of sick units are given in Appendix 14-I-M. |
|
6.38 |
FAST TRACK CLEARANCE PROCEDURE |
| Eligibility |
6.38.1 |
EOUs having a status holder certificate under FTP shall be eligible for Fast
Track Clearance Procedure. |
| Examination of Import Cargo |
6.38.2 |
Status holder units shall be exempted from examination of import cargo at
port of import. However, jurisdictional Commissioner of Customs / Central Excise
may examine consignments at unit’s place on random basis. |
| Domestic procurement and import of goods |
6.38.3 |
Units having physical export turnover of Rs. 15 crores and above in
preceding financial year shall be allowed to import goods without payment of
duty on basis of pre-authenticated procurement certificate issued by
jurisdictional Customs/Central Excise Authority. |
| Installation of Fax Machine/Computers |
6.38.4 |
Eligible EOUs may install one fax machine and two computers in their
administrative / registered office outside bonded premises under prior
intimation to jurisdictional Asstt. / Deputy Commissioner of Customs or Central
Excise. |
| Procurement of DG sets |
6.38.5 |
Procurement of DG set of capacity commensurate with actual requirement of
unit shall be permitted under intimation to DC and jurisdictional Central Excise
authority. |
| Temporary removal of Capital Goods |
6.38.6 |
Eligible EOU may remove their capital goods or parts thereof for repairs
under prior intimation to jurisdictional Asstt. / Deputy Commissioner of Customs
or Central Excise. |
| Clearance of rejects in DTA |
6.38.7 |
Personal carriage of samples of Gems & Jewellery by status holder EOUs are
allowed subject to limit fixed in para 6.23 without a need for prior permission
from DC / Customs / Central Excise. |
| Activities which do not require permission
|
6.38.8 |
In respect of following activities of a status holder, permission will not
be required from DC or jurisdictional Central Excise authority:
DTA sale of finished products in terms of para 6.8(a) of FTP; Participation in
exhibition and personal carriage of Gems & Jewellery for export promotion tours
subject to fulfillment of conditions of para 6.23 of HBP v1. However, prior
intimation thereof needs to be given. |
| Time bound disposal of applications |
6.39 |
DC shall dispose off applications expeditiously.
Following time schedule shall normally be followed to dispose of applications
provided application is complete in all respects and is accompanied
by prescribed documents. |
|
|
| S. No |
Category of Application |
Time limit for disposal
(days) |
| 1 |
Issue of LoP / LoI |
15 |
| 2 |
Conversion of LoP / LoI |
15 |
| 3 |
Acceptance of LUT 3 |
3 |
| 4 |
Renewal of LUT 3 |
3 |
| 5 |
Permission for broad banding / diversification |
3 |
| 6 |
Permission for change in locations |
7 |
| 7 |
Permission for Advance DTA sale |
2 |
| 8 |
Permission for merger of units |
7 |
| 9 |
Permission for enhancement of production capacity |
3 |
| 10 |
Cancellation of LoP |
3 |
| 11 |
Permission for debonding / exit |
7 |
| 12 |
Permission for DTA sale |
2 |
| 13 |
Eligibility certificate for employment visa for lower level
technicians |
2 |
| 14 |
Issue of Green Card |
2 |
| 15 |
Renewal of Green Card |
Same day |
| 16 |
Permission to lease CG |
1 |
| 17 |
Permission for disposal of scrap/waste |
2 |
| 18 |
Permission for change in name |
2 |
| 19 |
Inter Unit Transfer |
2 |
| 20 |
Wastage Norms, ad-hoc |
2 |
| 21 |
Permission for re-import |
Same day |
| 22 |
Permission for re-export |
Same day |
| 23 |
Permission for replacement/repair of goods |
Same day |
| 24 |
Allotment of I.E. Code |
1 |
| 25 |
Authorization of softex form |
1 |
| 26 |
Reimbursement of CST claims |
7 |
| 27 |
Issue of GSP Certificate |
Same day |
| 28 |
Permission for conversion of EOU to STPI, EPCG |
5 |
| 29 |
Permission of final exit of EOU |
5 |
| 30 |
Permission of extension of EOU |
2 |
| 31 |
Permission to allow increase in value of CG |
2 |
| 32 |
Permission for export through exhibition / tour |
2 |
| 33 |
Reimbursement of Duty Drawback / TED |
7 |
|