EXIT From EOU scheme

[Desikan Srinivasan]

We want to exit from EOU scheme. We have some export proceeds not realised yet but the NFE is positive excluding this unrealised export proceeds. The customs are not issuing the NOC till the realisation of the full export proceeds . They are asking to pay the duty on the duty free raw material used in the sales for which proceed not realised yet to issue the NOC. As per the FTP para 6.18 no such clause is there for exit for EOU scheme . Can anyone clarify on this please whether we need to pay duty on the Raw Materail used in unrealised export proceeds eventhough NFE is positive ?

AI Summary

Company Faces Customs Duty Demands on Duty-Free Materials to Exit EOU Scheme; Options Under FTP Para 6.18 Explained A company seeks to exit the Export Oriented Unit (EOU) scheme but faces issues with customs over unrealized export proceeds. Customs demands payment of duties on duty-free raw materials used in sales with unrealized proceeds before issuing a No Objection Certificate (NOC). A respondent clarifies that under Foreign Trade Policy (FTP) para 6.18, exiting the EOU scheme requires payment of differential customs duties, and options like Cenvat Credit and Advance Authorisation are available. Another respondent advises that if export proceeds are unrealized within the permissible period, the company should provide an undertaking to pay duties if proceeds remain unrealized after this period.