Exemption for inputs and capital goods allows duty-free procurement for export-oriented, EHTP and STP production units. Exemption from excise duty and additional excise duty is granted on specified goods (Annexure I) when procured for manufacture and packaging in 100% export oriented undertakings, for manufacture/development of electronic hardware in EHTP units, or for software development in STP units, subject to conditions including prior approval of the user industry, direct procurement from manufacturers, exclusive use for export obligations, execution of a bond for accountal, compliance with modified Central Excise Rules procedures and verification by designated authorities; procedural permissions for outward movement, destruction, training use, and clearance on payment of duty in specified cases are provided.