Export Oriented Unit exemption remains limited to one five-year period despite renewal of approval

Exemption on purchase turnover of industrial raw materials for a 100% Export Oriented Unit under SRO No. 1090 of 1999 was confined to a single five-year period. The later amendment changed only the commencement point to the date of commercial production, but did not create a fresh exemption cycle on renewal of approval. The relevant date remained the original approval of the unit, and renewal could not generate a new five-year entitlement. The assessee was therefore not entitled to claim exemption for a further period from the date of subsequent renewal.

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Issues: Whether exemption on purchase turnover of industrial raw materials for a 100 per cent Export Oriented Unit under Notification SRO No. 1090 of 1999 could be availed for a fresh five-year period on renewal of approval by the Central Government.

Analysis: The notification granted exemption only for five years from the date of approval of the unit as a 100 per cent EOU. The later amendment shifted the commencement point to the date of commercial production, but the scheme continued to restrict the exemption to a single five-year period. On the terms of the notification, the relevant date remained the first approval, and renewal of recognition could not create a fresh entitlement for another five years. Accepting the contrary view would allow recurring renewals to produce a perpetual exemption, which was inconsistent with the notification.

Conclusion: The exemption period could not be extended by renewal of EOU approval, and the assessee was not entitled to claim a fresh five-year exemption from the date of subsequent renewal.

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