EXPORT ORIENTED UNITS (EOUs),
ELECTRONICS HARDWARE TECHNOLOGY PARKS (EHTPs),
SOFTWARE TECHNOLOGYPARKS (STPs) AND
BIO-TECHNOLOGY PARKS (BTPs)
Objectives of these schemes are to promote exports, enhance foreign exchange earnings, attract investment for export production and employment generation.
Units undertaking to export their entire production of goods and services(except permissible sales in DTA), may be set up under the Export Oriented Unit (EOU) Scheme, Electronics Hardware Technology Park (EHTP) Scheme, Software Technology Park(STP) Scheme or Bio-Technology Park (BTP) Scheme for manufacture of goods, including repair, re-making, reconditioning, re-engineering, rendering of services, development of software, agriculture including agro-processing, aquaculture, animal husbandry, bio-technology, floriculture, horticulture, pisciculture, viticulture, poultry and sericulture.
Trading units are not covered under these schemes.
An EOU / EHTP / STP / BTP unit may export all kinds of goods and services except items that are prohibited in ITC (HS).
Application for setting up an EOU shall be considered by Unit Approval Committee (UAC)/ Board of Approval (BoA) as the case may be, as detailed in the Hand Book of Procedure. A detail of administration of EOUs and power of DC is given in HBP.
In case of units under EHTP / STP schemes, necessary approval / permission under relevant paras of this Chapter shall be granted by officer designated by Ministry of Communication and Information Technology, Department of Electronics & Information Technology, instead of DC, and by Inter-Ministerial Standing Committee (IMSC) instead of BOA.
On approval, a Letter of Permission (LoP) / Letter of Intent (LoI) shall be issued by DC / designated officer to EOU / EHTP / STP / BTP unit. The validity of LoP/LoI shall be given in the Hand Book of Procedures.
Only projects having a minimum investment of Rs.1 Crore in plant & machinery shall be considered for establishment as EOUs.
Import of capital goods will be on a self-certification basis. Goods imported by a unit shall be with actual user condition and shall be utilized for export production.
And shall be without payment of duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 and additional duty, if any, leviable thereon under Section 3(1), 3(3) and 3(5) of the said Customs Tariff Act. Such imports and/ or procurements shall be made without payment of integrated tax and compensation cess leviable thereon under section 3(7) and 3(9) of the Customs Tariff Act, 1975 as per notification issued by the Department of Revenue and such exemptions would be available upto31.03.2020.
Import / Domestic Procurement of Goods
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:
(1) DG sets, captive power plants, transformers and accessories for all above.
(2) Pollution control equipment.
(3) Quality assurance equipment.
(4) Material handling equipment, like fork lifts and overhead cranes, mobile cranes, crawler cranes, hoists and stackers.
(5) 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 / Air conditioning system, panel for electrical and special data transmission cable.
(6) Security Systems
(7) Tools, jigs, fixtures, gauges, moulds, dyes, instruments and accessories.
(c) Raw materials for making capital goods for use within unit.
(1) Prototypes and technical samples for existing product(s) and product diversification development or evaluation.
(2) Drawings, blue prints, charts, microfilms and technical data.
(3) 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.
Second hand capital goods, without any age limit, may also be imported with or without payment of duty/ taxes as provided under Para 6.01(d) (ii) above.
EOU / EHTP / STP / BTP unit shall be a positive net foreign exchange earner.
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.
Scrap / waste / remnants arising out of production process or in connection therewith may be sold in DTA, as per SION notified under Duty Exemption Scheme, on payment of applicable duties and/ or taxes and compensation cess.
There shall be no duties / taxes on scrap / waste / remnants, in case same are destroyed with permission of Customs authorities. The expression “no duties/ taxes” shall not include applicable taxes and cess under the GST laws.
(i) EOU/EHTP/STP /BTP units, including gems and jewellery units, may be on the basis of annual permission from Customs authorities, sub – contract production processes to DTA through job work which may also involve change of form or nature of goods, through job work by units in DTA.
EOU may, with annual permission from Customs authorities, under take job work for export, on behalf of DTA exporter, provided that goods are exported directly from EOU and export document shall jointly be in name of DTA/ EOU. For such exports, DTA units will be entitled for refund of duty paid on inputs by way of brand rate of duty drawback. However, such brand rate of drawback shall be as per Customs and Central Excise Duties Drawback Rules, 2017 and shall be limited to Customs duties and Central Excise Duties (in respect of eligible items covered under Schedule IV of Central Excise Act, 1944).
Sub – contracting of both production and production processes may also be under taken without any limit through other EOU/EHTP/ STP/ BTP/ SEZ units, on the basis of records maintained inunit.
EOU/EHTP/STP/BTP units may sub – contract part of production process abroad and send intermediate products abroad as mentioned in LoP. No permission would be required when goods are sought to be exported from sub – contractor premises abroad. When goods are sought to be brought back, prior intimation to concerned DC and Customs authorities shall be given.
In case an EOU / EHTP/ STP/BTP unit is unable to utilize goods and services, imported or procured from DTA, it may be:
(i) Transferred to another EOU/EHTP/STP/BTP/SEZ unit; or
(ii) Disposed of in DTA with intimation to Customs authorities on payment of applicable duties and/ or taxes and compensation cess. In addition, exemption of duties of Customs leviable under First Schedule of the Customs Tariff Act, 1975 availed, if any on the goods , at the time of import will also be payable and submission of import Authorisation; or
(iv) Such transfer from EOU/EHTP/STP/BTP unit to another such unit would be treated as import for receiving unit.
Time Bound Disposal of Applications
DC shall dispose of applications expeditiously. Following time schedule shall normally be followed to dispose of applications provided application is complete in all respects and is accompanied with 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|
|4||Renewal of LUT||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|