TaxTMI 
TaxTMI 
Foreign Trade Policy (FTP) announced on 31.8.2004- Amendment of notifications relating to EOU and Gems and Jewellery Export Promotion Schemes- Reg
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.... to invite your attention to the new Foreign Trade Policy (FTP), 1st September, 2004- 31st March, 2009, brought into effect from 1.9.2004 .The New Foreign Trade Policy and Handbook of Procedures (HOP) Vol I, 2004-2009, replace the old Exim Policy and Handbook of Procedures 2002-2007. In the new Foreign Trade Policy and HOP certain changes have been introduced relating to EOU/EHTP/STP Schemes and Gem and Jewellery Export Promotion Scheme. To implement the changes amendments have been made in the notifications governing duty free import/ procurement of goods and DTA sale of goods by EOU/EHTP/STP . Amendments have also been made in the notifications relating to Gem and Jew....
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....nits can procure these spares etc from indigenous sources also. (ii) Extension of CENVAT credit to EOUs. 4. At present, EOUs ( including STP/EHTP units) are allowed to import as well as procure goods from domestic tariff area without payment of duty. Therefore, there was no necessity for extending CENVAT credit facility to them . However, some EOU's have to procure their raw materials on payment of duty also. As a trade facilitation measure, it has been decided to allow EOUs (including STP/EHTP units) an option either to procure the goods from DTA without payment of duty under CT-3 procedure or to procure the goods on payment of duty and avail CENVAT credit. The credit could be utilized by them as per the Cenvat Credit Rul....
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....nbsp; 8. Under the present dispensation, in case of DTA sale of goods manufactured by EOU/EHTP/STP, if basic customs duty and CVD are both 'nil' on similar goods when imported, no duty is payable by the EOU as per proviso to section 3(1) of the Central Excise Act, 1944. Similar goods manufactured in DTA suffer duty on inputs (as CENVAT Credit is not available in such cases) whereas the EOU/EHTP/STP avail the facility of duty free inputs. This puts the DTA units manufacturing similar goods at a comparative disadvantage. In order to remove this anomaly, a new provision, i.e paragraph 6.8 (j), has been introduced in the FTP providing that in case of DTA sale of goods manufactured b....
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....ise Act, 1944, which is equivalent to aggregates of duties of customs leviable on similar imported goods. However, under notification No. 23/2003-Central Excise, dated 31.3.2003, it has been provided that the units, manufacturing goods out of wholly indigenous material, are allowed to clear such goods in DTA on payment of normal excise duty i.e. the duty which any manufacturer located in DTA pays on similar goods . If supplies from EOU unit 'A' to EOU unit 'B' is 'deemed export' for 'A', then it should be 'deemed import' for 'B' and 'B' should not be entitled to exemption notification which is based on use of only indigenous raw materials. 12. To implement this provision, notification No. 23/2003-CE dated 31.3.2003, governing....
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....ted that the exemption is limited to the specified quantity of textile materials and textile fabrics only. In other words, concession would not be available to, say, zip fasteners, though used in the textile sector. (vi) Rate of Depreciation Applicable to Capital Good 15. Hitherto, EOUs (including EHTP/STP units) were allowed to clear /debond capital goods in DTA on payment of duty at the depreciated value. The rate of depreciation for computer and computer peripheral was 20% per annum and for other capital goods, it was 10% per annum. However, there was no upper limit of depreciation and depreciation upto 100% was allowed. 16. In case of SEZ units, different graded rates of depreciation have been prescribed. The ....