SETTING UP OF A EOU

[Nash Industries I Pvt Ltd]

A manufacturer supplying his entire production to 100 % EOU/EHTP. Can such manufacturer convert the unit into an EOU and reap the export benefit as per Chapter 6 of FTP. Or is it mandatory that the unit to have at least 50% physical exports to convert into a EOU.

Thanks .

Regards,

S.Ramaswamy

AI Summary

EOU conversion: units supplying exclusively to EOUs governed by NFE criterion permitting conversion under FTP with duty rules.
Conversion to an EOU depends on the FTP's NFE requirement (the mid term review removed the 50% physical export test) and prescribed conversion procedures; supplies made exclusively to EOUs (deemed exports or inter unit transfers under para 6.13) must be evaluated against the NFE and procedural criteria. Capital goods procured in DTA after duty payment or imported under schemes such as EPCG (with export obligations met) are not chargeable to customs duty on removal to DTA on exit, subject to FTP and scheme conditions.