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<h1>EOU Scheme Permits Subcontracting with DTA Units; Governed by Customs Act Sections 58 & 65, Central Excise Compliance Required</h1> The 100% Export Oriented Unit (EOU) Scheme allows EOUs to subcontract production processes to Domestic Tariff Area (DTA) units or undertake job work for DTA units. EOUs are licensed under sections 58 and 65 of the Customs Act, 1962, but also adhere to the Central Excise Act, 1944. They can subcontract up to 50% of the FOB value of exports to manage excess orders. EOUs must register under Central Excise if interacting with DTA for procurement or sales. Specific provisions and procedures are outlined in exemption notifications and CBEC Circulars to facilitate these activities without extensive outsourcing.