| 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
services 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 a licence for all
purposes. Standard format for LOP for EOU units is given in Appendix
14-IE . |
|
6.3.8 |
EOUs shall have separate ear-marked
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 EOUs/EHTP/STP/BTP 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 60 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: |
|
|
| (a) |
Raw materials, components, consumables,
intermediates, spares and packing materials: |
| (b) |
Capital goods, whether new or second-hand,
including inter-alia the 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, tele-conference equipment, Servo Control System,
Air-conditioners / Air-conditioning system, panel for
electricals and special data transmission cable |
| (vi) |
Security Systems. |
| (vii) |
Tools, jigs, fixtures, gauges,
moulds, dyes, instruments and accessories; |
|
| (c) |
Raw material for making capital
goods for use within the 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,
server. |
|
| (e) |
Spares and consumables for all the
above items |
| (f) |
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: |
|
|
| (a) |
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 farms/fields/quarries
with prior intimation to the jurisdictional Customs/ Central
Excise authorities, provided the ownership of the goods rests
with EOU units. |
| (b) |
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 |
| (c) |
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. |
| (d) |
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/ lap- top 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 authorised 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 Unit
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/LOP/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 DG Sets from one
unit of EOU/EHTP/STP/BTP to another is permitted. |
| Supply of precious /semi-precious/synthetics
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 Licence at the rates and for
the items mentioned in the Handbook (Vol.I). The procedure for submission
of application for grant of Replenishment Licence 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 entitlement |
6.18 |
Application for grant of all the entitlements
may be made to the Development Commissioner concerned. |
| Export through other exporters |
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: |
|
|
| (a) |
Goods shall be produced in
the EOU/EHTP/STP/BTP unit concerned. |
| (b) |
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. |
| (c) |
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. |
| (d) |
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. |
| (e) |
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 |
Clubbing of FOB value of export of an
EOU/ EHTP/STP/BTP units with FOB value of export of its parent company
in the DTA or vice versa for the purpose of according Export House,
Trading House, Star Trading House or Super Star Trading House status
is permitted. |
|
6.20.2 |
Sectoral norms as notified by the Government
shall apply to FDI in services 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:- |
|
|
| (a) |
Goods, finished or semi finished,
including studded jewellery, taken out for sub- contracting
shall be brought back to the unit within 90 days. |
| (b) |
No cut and polished diamonds, precious
and semi-precious 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 the
said jewellery |
| (d) |
EOUs shall be eligible for wastage
as applicable for sub-contracting and against exchange. |
| (e) |
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 workers’ 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: |
|
|
| (a) |
Supply of inputs by the EOUs
to the contract farm(s) shall be subject to the input-output
norms approved by the DGFT/BOA. |
| (b) |
There shall be contract farming
agreement between the EOU and the DTA farmer(s); |
| (c) |
The 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 the duty foregone on the capital goods/inputs proposed to
be taken out to the Deputy/Assistant Commissioner of Customs/Central
Excise till the unit completes two years. |
|
| Export through Exhibitions/Export Promotion
tours |
6.23 |
EOUs/EHTP/STP/BTP may export goods
for holding/ participating in exhibitions abroad with the permission
of Development Commissioner subject to the following conditions:- |
|
|
| (a) |
The unit shall produce to the Customs
authorities the letter in original or its certified copy containing
approval of the Development Commissioner. For gems and jewellery
items, a self certified photograph of the products shall also
be submitted. |
| (b) |
In case of re-import, such items,
on arrival shall be verified along with the export documents
before clearance. |
| (c) |
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. |
| (d) |
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 show rooms
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 show rooms/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. |
|
|
| (a) |
Copy of the shipping bill filed
by the EOUs ; |
| (b) |
A copy of the Currency Declaration
Form filed by the Foreign buyer with the Customs at the time
of his arrival; and |
| (c) |
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:-
(a) Copy of Shipping Bill;
(b) 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:-
(a) Permission letter from customs for exports.
(b) 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 and return. Any foreign exchange payment for this purpose
will also be allowed. |
|
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. |
| Donation of Computer and Computers
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, key-board 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 Custom 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:- |
|
|
| (a) |
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), Item of manufacture requiring industrial licence
under the Industrial (Development & Regulation) Act, 1951
shall be considered by the BOA. |
| (b) |
to consider and permit conversion
of units in SEZ to EOU; |
| (c) |
to monitor the performance
of the Units; |
| (d) |
to supervise and monitor permission,
clearances, licences granted to the units and take appropriate
action in accordance with law; |
| (e) |
to call for information required
to monitor the performance of the unit under the permission,
clearances, licenses granted to it; |
| (f) |
to perform any other function
delegated by the Central Government or its agencies; |
| (g) |
to perform any other function
as may be delegated by the State Governments or its agencies;
and |
| (h) |
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). 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 |
|
|
|
(1) |
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. |
|
|
(2) |
Conversion of sick/closed DTA
unit into EOU; |
|
|
(3) |
Conversion of EOU to STP/EHTP/BTP
and vice versa as per the prescribed procedure; |
|
|
(4) |
To allow increase in the value
of capital goods in terms of Indian Rupees, on account of foreign
exchange rate fluctuations; |
|
|
(5) |
To permit capacity enhancement
without any limit in case of de-licensed industries only; |
|
|
(6) |
Permit broad-banding for similar
goods and activities mentioned in the LOP or to provide for
backward or forwarded linkages to the existing line of manufacture; |
|
|
(7) |
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; |
|
|
(8) |
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; |
|
|
(9) |
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) ; |
|
|
(10) |
Cancel LOP wherever warranted;. |
|
|
(11) |
Permit merger of two or more
units into one unit provided the units fall with in the jurisdiction
of the same Development Commissioner/Designated Officer subject
to the conditions that the activities are covered under the
provision of broad banding; |
|
|
(12) |
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 |
|
|
(13) |
Do valuation of exports declared
on SOFTEX form by EOUs as per RBI A.D. (M.A Series) Circular
A P (DIR series Circular No.9 dated 25.10.2001); |
|
|
(14) |
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 |
|
(15) |
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. |
| Importer Exporter Code No. |
|
(16) |
Allot Importer-Exporter Code number
for EOUs, if the same has already not been allotted to the entity; |
| Green Card |
|
(17) |
Issue of Green Card automatically
after execution of Legal Undertaking; |
|
|
(18) |
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; |
|
|
(19) |
Publicity of EOU/EHTP/STP/BTP Scheme
under their jurisdiction. |
|
| Clearance of capital goods under EPCG
Scheme |
6.35 |
Clearance of capital goods imported as
second hand shall be allowed as per the Policy under EPCG scheme.
In case of second hand capital goods clearance in DTA may be allowed
on payment of duty after 2 years from date of import. |
| 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 coversion, 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 Licensing Scheme, it will apply
to the Advance Licensing 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 Licence, 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 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. |
| Fast Track Clearance |
6.39.1 |
A fast track clearance procedure for EOUs
having status holder certificate under the Policy is to facilitate
functioning of performing EOUs, the following fast track clearance
procedure is notified. The eligible units shall avail of this procedure
on self-certification basis during the validity of their status. For
this purpose the units will have to get the Authorized Signatories
notified from the jurisdictional Development Commissioner. The intimations,
wherever, prescribed be sent electronically and digitally signed by
these notified authorized signatories. |
|
6.39.2 |
The units will execute the B-17 bond to
facilitate duty free imports/domestic procurement. The B17 Bond in
such cases shall be without BG/Security or Surety, |
|
6.39.3 |
The eligible EOU units shall be allowed
clearance of goods on the basis of self certification and eligible
for self sealing of containers as contained in Circular No. 426/59/98-CE. |
|
6.39.4 |
For the purpose of examination of both
import and export cargo at Gateway port, the procedures applicable
to SEZ units shall apply to status holder EOUs. |
|
6.39.5 |
Such units shall make clearance of rejects
up to 5% into DTA, sale of waste/scrap & DTA sales of all categories
without obtaining any permission or requiring any supervision from
the Central Excise officers or Development Commissioner. Such clearances
shall be undertaken on the basis of prior intimation to Development
Commissioner and jurisdictional Central Excise Authorities. |
|
6.39.6 |
The status holder units shall be exempt
from examination of import cargo at port of import and at the unit's
premises. However, advance intimation of imports shall be filed to
the jurisdictional Central Excise range. The re-warehousing of cargo
shall be allowed based on such intimation only. |
|
6.39.7 |
All the domestic procurements/imports
duty free shall be made by the units on the strength of self issued
CT3/Procurement Certificates. The Serial No. of the preprinted CT3/Annexure
Booklet being put to use shall be intimated in advance to jurisdictional
Assistant Commissioner/Deputy Commissioner of Central Excise. The
details of the duty free procurement/imports shall be filed every
month by the unit to the jurisdictional AC/DC Central Excise. |
|
6.39.8 |
Export of samples, return of rejected
imported/indigenous material will be made by the unit without seeking
any permission. However, an advance intimation shall be filed to the
jurisdictional Central excise. |
|
6.39.9 |
Procurement of DG set shall be permitted
without the permission from Development Commissioner and the jurisdictional
Dy. Commissioner, Central Excise. |
|
6.39.10 |
The status holder units shall be eligible
for factory stuffing without any permission. |
|
6.39.11 |
The clearance of samples and temporary
removal of Capital Goods and parts for repair shall be allowed on
self-certification basis. |
|
6.39.12 |
Sub-contracting shall be based on prior
intimation of the process and the details of the sub contractor on
annual basis to the jurisdictional Assistant Commissioner/Deputy Commissioner
of Central Excise. Provisions of Circular 65/2002-Cus in terms of
taking samples, retention of samples and the finished goods received
from job-worker and period restriction of 30 days shall not be applicable
to the Status Holder EOUs. |
|
6.39.13 |
In respect of the following activities
of a status holder EOU, permission will not be required from the Development
Commissioner/jurisdictional Central Excise Authorities and instead
unit shall be required to send prior intimation :- (i) import
of capital goods
(ii) installation of fax machine
(iii) laptop from outside the approved premises
(iv) DTA Sale of finished products
(v) Inter Unit Transfer
(vi) Sub-contracting
(vii) Participation in Exhibitions
(viii) Personal carriage of Gems & jewellery for export promotion
tours
(ix) Replacement/repair of imported indigenous goods
(x) Supply of sale of samples
(xi) Sale of unutilized material . |
