100% EOU - claim of exemption u/s 10B

[vipin mittal]

FACTS WE Swadesh Engg. Industries started in 1994 as a Domestic unit manufacturing Nuts & bolts & also doing Job work for the same. We converted ourself in the year 2000 from Domestic unit in to a 100% Export Oriented Unit (EOU). As You know under section 10B of IT Act Profit & Gains from a 100% EOU is fully exempt from I. Tax for a consecutive 10 years. We have claimed the same deduction from Assessment Year 2000-01 to 2009-10. Querry. Under sunset clause Sh. Kamal Nath Honable Minister of Commerce & Industry extended this Period up to 31.03.2010 & further 31.03.2011. Now our Point is can we claim the deduction under section 10B in Assessment Year 2010-11 & 2011-12.

AI Summary

Swadesh Engg. Industries cannot extend tax exemption under section 10B beyond the ten-year limit despite policy extensions. Swadesh Engg. Industries, initially a domestic manufacturer of nuts and bolts, transitioned to a 100% Export Oriented Unit (EOU) in 2000, claiming tax exemption under section 10B of the Income Tax Act for ten years, from the assessment year 2000-01 to 2009-10. The query raised was whether they could extend this exemption to the assessment years 2010-11 and 2011-12, following extensions announced by the Commerce Minister. The response clarified that despite policy extensions, the ten-year tax holiday limit remains unchanged, and benefits cannot be claimed beyond this period.