Conversion of DTA unit in EOU

[Narendra Soni]

Dear Experts.

A owner has two units 'A' & 'B'. Both are manufacturing excisable products.

In unit 'A', semi finished and finished products are manufactured. Finished product are sold directly from this unit,semi finished products sent to unit 'B' for further processing under Job work and exported directly from unit 'B'.

like wise this, In unit 'B', finished and semi finished products are manufactured. Finished product are sold directly from this unit,semi finished products sent to unit 'A' for further processing under Job work and returned back to unit 'B' and exported from unit 'B'.

Both the units also doing job work for other manufactures and sending for job work to other manufacturer under Notification No.214/86.

There are 20 % domestic sale and 80% export, hence owner wants to convert in EOU,please suggest procedure in details.

[Mahir S]

Broadly speaking, DTA units intending to get converted into EOU unit will follow the procedure as below for such conversion:-

(1) Apply to concerned Development Commissioner (DC) in a manner as applicable to new units.

(2) After getting approval of the project and obtaining Letter of Permission (LOP) from DC, execute Legal Undertaking (LUT) in prescribed format with DC.

(3) Thereafter, apply for private bonded licence to concerned Customs/ Central Excise authority with execution of B-17 Bond.

You may also refer to Para 6.38 of Foreign Trade Handbook of Procedure 2015-2020 and also approach your jurisdictional Assistant Commissioner for further guidance.

AI Summary

Conversion to EOU requires Development Commissioner approval, Letter of Permission, Legal Undertaking and a bonded licence with B-17 Bond. Conversion requires staged regulatory approvals: apply to the Development Commissioner for project approval and obtain a Letter of Permission (LOP); execute the prescribed Legal Undertaking (LUT) with the Development Commissioner; and apply to Customs/Central Excise for a private bonded licence supported by execution of the prescribed B-17 Bond. Consult the Foreign Trade Handbook (Para 6.38) and the jurisdictional Assistant Commissioner for procedural guidance.