TaxTMI 
TaxTMI 
EXPORT ORIENTED UNITS (EOUs), ELECTRONICSHARDWARETECHNOLOGYPARKS (EHTPs), SOFTWARETECHNOLOGYPARKS (STPs) AND BIO-TECHNOLOGYPARKS (BTPs).
X X X X Extracts X X X X
X X X X Extracts X X X X
.... previous years exports shall also be allowed. (b) An EOU / EHTP / STP / BTP unit may import and /or procure, from DTA or bonded warehouses in DTA / international exhibition held in India, without payment of duty, all types of goods, including capital goods, required for its activities, provided they are not prohibited items of import in the ITC (HS). Any permission required for import under any other law shall be applicable. Units shall also be permitted to import goods including capital goods required for approved activity, free of cost or on loan / lease from clients. Import of capital goods will be on a self certification basis. Goods imported by a unit shall be with actual user condition and shall be utilized for export production. (c) State Trading regime shall not apply to EOU manufacturing units. However, in respect of Chrome Ore / Chrome concentrate, State Trading Regime as stipulated in export policy of these items, will be applicable to EOUs. (d) EOU / EHTP / STP / BTP units may import / procure from DTA, without payment of duty, certain specified goods for creating a central facility. Software EOU / DTA units may use such facility for export of software. (e) An EOU ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ods without payment of duty. b) An EOU / EHTP / BTP / STP unit may sell capital goods and lease back the same from a Non Banking Financial Company (NBFC), subject to the following conditions: i) The unit should obtain permission from the jurisdictional Deputy / Assistant Commissioner of Customs or Central Excise, for entering into transaction of 'Sale and Lease Back of Assets', and submit full details of the goods to be sold and leased back and the details of NBFC; ii) The goods sold and leased back shall not be removed from the unit's premises; iii) The unit should be NFE positive at the time when it enters into sale and lease back transaction with NBFC; iv) A joint undertaking by the unit and NBFC should be given to pay duty on goods in case of violation or contravention of any provision of the notification under which these goods were imported or procured, read with Customs Act, 1962 or Central Excise Act, 1944, and that the lien on the goods shall remain with the Customs / Central Excise Department, which will have first charge over the said goods for recovery of sum due from the unit to Government under provision of Section 142(b) of the Customs Act, 1962 read with the Cu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to existing units and units in EHTP / STP / BTP, Handicrafts / Agriculture / Floriculture / Aquaculture / Animal Husbandry / Information Technology, Services, Brass Hardware and Handmade jewellery sectors. BoA may also allow establishment of EOUs with a lower investment criteria. Application & Approvals 6.7 (a) Applications for setting up of units under EOU scheme, other than proposals for setting up of units in services sector (except R&D, software and IT enabled services, or any other service activity as may be delegated by BoA), shall be approved or rejected by the Units Approval Committee within 15 days as per criteria indicated in HBP v1. (b) In other cases, approval may be granted by BoA set up for this purpose as indicated in HBP v 1. (c) Proposals for setting up EOU requiring industrial licence may be granted approval by DC after clearance of proposal by BoA and DIPP within 45 days. (d) Applications for conversion into an EOU / EHTP / STP / BTP unit from existing DTA units, having an investment of Rs. 50 crores and above in plant and machinery or exporting Rs. 50 crores and above annually, shall be placed before BoA for a decision. DTA Sale of Finished Products / Rej....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tudded jewellery, duty shall be payable as applicable. (d) Unless specifically prohibited in LoP, rejects within an overall limit of 50% may be sold in DTA on payment of duties as applicable to sale under sub-para 6.8(a) on prior intimation to Customs authorities. Such sales shall be counted against DTA sale entitlement. Sale of rejects upto 5% of FOB value of exports shall not be subject to achievement of NFE. (e) Scrap / waste / remnants arising out of production process or in connection therewith may be sold in DTA, as per SION notified under Duty Exemption Scheme, on payment of concessional duties as applicable, within overall ceiling of 50% of FOB value of exports. Such sales of scrap / waste / remnants shall not be subject to achievement of positive NFE. In respect of items not covered by norms, DC may fix ad-hoc norms for a period of six months and within this period, norms should be fixed by Norms Committee. Ad-hoc norms will continue till such time norms are fixed by Norms Committee. Sale of waste / scrap / remnants by units not entitled to DTA sale, or sales beyond DTA sale entitlement, shall be on payment of full duties. Scrap / waste / remnants may also be exported. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter unit supply as provided at paragraph (c) below:] (a) Supplies effected in DTA to holders of Advance Authorisation / Advance Authorisation for annual requirement / DFIA under duty exemption / remission scheme / EPCG scheme. However, printing sector EOUs (or any other sector that may be notified in HBP v 1), cannot supply goods, where basic customs duty and CVD is nil or exempted otherwise, to holders of Advance Authorisation / Advance Authorization for annual requirement. (b) Supplies effected in DTA against foreign exchange remittance received from overseas. (c) Supplies to other EOU / EHTP / STP / BTP / SEZ units, provided that such goods are permissible for procurement in terms of para 6.2 of FTP. (d) Supplies made to bonded warehouses set up under FTP and / or under section 65 of Customs Act and free trade and warehousing zones, where payment is received in foreign exchange. (e) Supplies of goods and services to such organizations which are entitled for duty free import of such items in terms of general exemption notification issued by MoF, as may be provided in HBP v 1. (f) Supplies of Information Technology Agreement (ITA -1) items and notified zero duty telecom / el....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in India. iii) Reimbursement of duty paid on fuel procured from domestic oil companies / Depots of domestic oil Public Sector Undertakings as per drawback rate notified by DGFT from time to time. Reimbursement of additional duty of excise levied on fuel under the Finance Acts would also be admissible. iv) CENVAT Credit on service tax paid. Other Entitlements 6.12 Other entitlements of EOU / EHTP / STP / BTP units are as under: (a) Exemption from Income Tax as per Section 10A and 10B of Income Tax Act. (b) Exemption from industrial licensing for manufacture of items reserved for SSI sector. (c) Export proceeds will be realized within 12 months. (d) Units will be allowed to retain 100% of its export earning in the EEFC account. (e) Unit will not be required to furnish bank guarantee at the time of import or going for job work in DTA, where unit has (i) a turnover of Rs. 5 crores or above; (ii) unit is in existence for at least three years; and (iii) The unit : (a) has achieved positive NFE / export obligation wherever applicable; (b) has not been issued a show cause notice or a confirmed demand, during the preceding 3 years, on grounds other than procedural violations, u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f both production and production processes may also be undertaken without any limit through other EOU / EHTP / STP / BTP / SEZ units, on the basis of records maintained in unit. (iv) EOU / EHTP / STP / BTP units may subcontract part of production process abroad and send intermediate products abroad as mentioned in LoP. No permission would be required when goods are sought to be exported from subcontractor premises abroad. When goods are sought to be brought back, prior intimation to concerned DC and Customs authorities shall be given. (c) Scrap / waste / remnants generated through job work may either be cleared from job worker's premises on payment of applicable duty on transaction value or destroyed in presence of Customs / Central Excise authorities or returned to unit. Destruction shall not apply to gold, silver, platinum, diamond, precious and semi precious stones. (d) Sub-contracting / exchange by gems and jewellery EOUs through other EOUs or SEZ units or units in DTA, shall be as per procedure indicated in HBP v1. Sale of Unutilized Material 6.15 (a) In case an EOU / EHTP / STP / BTP unit is unable to utilize goods and services, imported or procured from DTA, it may be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies. (c) Goods or parts thereof, on being imported / indigenously procured and found defective or otherwise unfit for use or which have been damaged or become defective subsequently, may be returned and replacement obtained or destroyed. In the event of replacement, goods may be brought back from foreign suppliers or their authorized agents in India or indigenous suppliers. The unit can take free of cost replacement (duty paid) from the authorized agents in India of foreign suppliers, provided the defective part is re-exported or destroyed. However destruction shall not apply to precious and semi precious stones and precious metals. Exit from EOU Scheme 6.18 (a) With approval of DC, an EOU may opt out of scheme. Such exit shall be subject to payment of Excise and Customs duties and industrial policy in force. (b) If unit has not achieved obligations, it shall also be liable to penalty at the time of exit. (c) In the event of a gems and jewellery unit ceasing its operation, gold and other precious metals, alloys, gems and other materials available for manufacture of jewellery, shall be handed over to an agency nominated by DoC, at price to be determined by that agency. (d) An ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ill be subject to fulfillment of positive NFE criteria. Conversion 6.19 (a) Existing DTA units may also apply for conversion into an EOU / EHTP / STP / BTP unit, and Income Tax benefits under Section 10A and 10B will be available for plant, machinery and equipment already installed. (b) Existing EHTP / STP units may also apply for conversion / merger to EOU unit and vice-versa. In such cases, units will remain in bond and avail exemptions in duties and taxes as applicable. Monitoring of NFE 6.20 Performance of EOU / EHTP / STP / BTP units shall be monitored by Units Approval Committee as per guidelines in HBP v1. Export through Exhibitions / Export 6.21 EOU / EHTP / STP / BTP are permitted to: Promotion Tours / showrooms abroad / Duty Free Shops (i) Export goods for holding / participating in exhibitions abroad with permission of DC. (ii) Personal carriage of gold / silver / platinum jewellery, precious, semi-precious stones, beads and articles. (iii) Export goods for display / sale in permitted shops set up abroad. (iv) Display / sell in permitted shops set up abroad, or in showrooms of their distributors / agents. (v) Set up showrooms / retail outlets at Internationa....