DTA sale by EOU - Payment of duty

[VENKATASUBRAMANIAN VENKATACHALAM]

CAN ANY BODY HELP ME CLARIFY THE FOLLOWING POINTS? 1. DTA SALE BY EOU - IF SALES IS MADE TO A CUSTOMER WHO IS ENJOYING 100% DUTY EXEMPTION AS PER CLAUSE 6.9 OF FTP WHETHER THIS SALE IS CONSIDERED AS DTA SALES/DEEMED EXPORTS, WHETHER 50% DTA ENTITLEMENT INCLUDES THIS SALE ALSO? 2. IN THE ABOVE CONTEXT WHETHER ANY DUTY IS PAYABLE BY THE EOU UNITS SINCE THE MATERIAL IMPORTED/LOCALLY PROCURED IS WITHOUT PAYMENT OF DUTY? PLEASE ENLIGHTNE ME QUOTING RELEVANT PROVISIONS OF THE LAW/POLICY. VENKAT, CHENNAI

[RadheyShyam Mangal]

As per para 6.9(1), an EOU can supply goods to holder of Advance Authorisation, DFIA,EPCG Holder . Such supply will be counted towards calculation of NFE and hence deemed export. Duty payable will be nil or as per extant exim scheme of Advance Authorisation, Dfia, EPCG. The 50% entitlement does not include such sale .

AI Summary

Clarification on DTA Sales: EOU Supplies to Advance Authorisation Holders Are Deemed Exports, Not Affecting 50% Entitlement An individual inquired about the duty implications of Domestic Tariff Area (DTA) sales by an Export Oriented Unit (EOU) when the customer enjoys 100% duty exemption under clause 6.9 of the Foreign Trade Policy (FTP). They questioned whether such sales count as DTA sales or deemed exports and if they affect the 50% DTA entitlement. The response clarified that supplies to holders of Advance Authorisation, DFIA, or EPCG are considered deemed exports, contributing to Net Foreign Exchange (NFE) calculations, with duty payable being nil or as per the relevant export-import scheme. The 50% entitlement does not include these sales.