Export Oriented Units (Eous), Electronics Hardware Technology Parks (Ehtps), Software Technology Parks (STPS) and Bio-Technology Parks (BTPS)
Export Oriented Units (Eous), Electronics Hardware Technology Parks (Ehtps), Software Technology Parks (STPS) and Bio-Technology Parks (BTPS)
Export Oriented Units (Eous), Electronics Hardware Technology Parks (Ehtps), Software Technology Parks (STPS) and Bio-Technology Parks (BTPS)
(a) An EOU / EHTP / STP / BTP unit may export all kinds of goods and
services except items that are prohibited in ITC (HS). However
export of gold jewellery, including partly processed jewellery,
whether plain or studded, and articles, containing gold of 8 carats
and above upto a maximum limit of 22 carats only shall be permitted.
(d) (i) An EOU / EHTP/ STP/ BTP unit may import and / or procure,
from DTA or bonded warehouses in DTA / international
exhibition held in India, all types of goods, including capital
goods, required for its activities, provided they are not
prohibited items of import in the ITC (HS) subject to conditions
given at para (ii) & (iii) below. 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.
(e) 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.
(f) EOU/EHTP/STP/BTP units may import/procure from DTA, with or
without payment of duties/taxes as provided at Para 6.01 (d)(ii) and
6.01(d)(iii) above, certain specified goods for creating a central
facility. Software EOU/ DTA units may use such facility for export of
software.
(h) Gems and jewellery EOUs may source gold / silver / platinum
through nominated agencies on loan / outright purchase basis. Units
obtaining gold / silver / platinum from nominated agencies, either
on loan basis or outright purchase basis shall export gold / silver /
platinum within 90 days from date of release.
(i) EOU / EHTP / STP / BTP units, other than service units, may export
to Russian Federation in Indian Rupees against repayment of State
Credit/ Escrow Rupee Account of buyer subject to RBI clearance, if
any.
(k) BOA may allow, on a case to case basis, requests of EOU / EHTP /
STP/ BTP units in sectors other than Gems & Jewellery, for
consolidation of goods related to manufactured articles and export
thereof along with manufactured article. Such goods may be allowed
to be imported / procured from DTA by EOU with or without
payment of duty and/or taxes as provided at Para 6.01 (d) (ii) and
(iii) above, as the case may be to the extent of 5% FOB value of such
manufactured articles exported by the unit in preceding financial
year. Details of procured / imported goods and articles
manufactured by the EOU will be listed separately in the export
documents. In such cases, value of procured / imported goods will
not be taken into account for calculation of NFE and DTA sale
entitlement. Such procured / imported goods shall not be allowed to
be sold in DTA. BOA may also specify any other conditions.
6.02 Second hand Capital goods
Second hand capital goods, without any age limit, may also be imported
with or without payment of duty/ taxes as provided under Para 6.01(d)(ii)
above.
(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:
(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;
EOU / EHTP / STP / BTP unit shall be a positive net foreign exchange
earner. In addition sector specific provision of Appendix 6 B of Appendices
& ANFs, where a higher value addition and other conditions are given, shall
be required to be followed. NFE Earnings shall be calculated cumulatively
in blocks of five years, starting from commencement of production.
Whenever a unit is unable to achieve NFE due to prohibition / restriction
imposed on export of any product mentioned in LoP, the five year block
period for calculation of NFE earnings may be suitably extended by BoA.
Further, wherever a unit is unable to achieve NFE due to adverse market
condition or any grounds of genuine hardship having adverse impact on
functioning of the unit, the five year block period for calculation of NFE
earnings may be extended by BOA for a period of upto one year, on a case
to case basis. The method of calculation of NFE in detail is given in Para
6.10 of Handbook of Procedures 2015-20
(b) LoP / LoI issued to EOU / EHTP / STP / BTP units by concerned
authority, subject to compliance of provision in Para 6.01 above,
would be construed as an Authorisation for all purposes.
(a) Deleted
(b) Deleted
(c) Deleted
(d) Deleted
6.08 DTA Sale of Finished Products / Rejects / Waste/ Scrap /
Remnants and By-products
(a) (i) Units, other than gems and jewellery units may sell finished
goods manufactured by them as specified in LoP (including by-
products, rejects, waste and scraps arising in the course of
production, manufacture, processing or packaging of such goods)
which are freely importable under FTP in DTA, subject to
fulfillment of positive NFE, on payment of excise duty, if
applicable, and/ or payment of GST and compensation cess along
with reversal of duties of Custom leviable under First Schedule
to the Customs Tariff Act, 1975 availed as exemption, if any on
the inputs utilized for the purpose of manufacturing of such
finished goods (including by-products, rejects, waste and scraps
arising in the course of production, manufacture, processing or
packaging of such goods). No DTA sale shall be permissible in
respect of, pepper & pepper products, marble and such other
items as may be notified from time to time.
(ii) Such DTA sale shall also not be permissible to units engaged in
activities of packaging / labeling / segregation / refrigeration /
compacting / micronisation / pulverization / granulation /
conversion of monohydrate form of chemical to anhydrous form
or vice-versa.
(iii)(a) Sales made to a unit in SEZ shall also be taken into account
for purpose of arriving at FOB value of export by EOU
provided payment for such sales are made from Foreign
Currency Account of SEZ unit.
(b) Sale to DTA would also be subject to mandatory requirement
of registration of pharmaceutical products (including bulk
drugs).
(iv) An amount equal to Anti Dumping duty under section 9A of the
Customs Tariff Act, 1975 leviable at the time of import, shall be
payable on the goods used for the purpose of manufacture or
processing of the goods cleared into DTA from the unit.
(v) The DTA sale by EOU/EHTP/STP/BTP units shall be subject to
payment of excise duty, if applicable, and/or payment of GST and
compensation cess along with reversal of duties of Custom
leviable under First Schedule to the Customs Tariff Act, 1975
availed as exemption, if any on the inputs utilized for the purpose
of manufacturing of such finished goods (including by-products,
rejects, waste and scraps arising in the course of production,
manufacture, processing or packaging of such goods). This
reversal of Customs Duty would be as per prevailing SION norms
or norms fixed by Norms Committee (where no SION norms are
fixed).
(vi) Such DTA sale shall also be subject to refund of any benefits
under Chapter 7 of FTP availed by the EOU/supplier as per FTP,
on the goods used for manufacture of the goods cleared into the
DTA.
(b) For services, including software units, sale in DTA in any mode,
including on line data communication, shall also be permissible up to
50% of FOB value of exports and /or 50% of foreign exchange
earned, where payment of such services is received in foreign
exchange.ii
(c) Gems and jewellery units may sell upto 10% of FOB value of exports
of the preceding year in DTA, subject to fulfillment of positive NFE.
The unit shall pay applicable GST and compensation cess along with
reversal of duties of Customs leviable under First Schedule of the
Customs Tariff Act, 1975 availed as exemption, on inputs used in
such jewellery.
(h) Deleted
(j) Deleted
(k) In case of new EOUs, advance DTA sale will be allowed not exceeding
50% of its estimated exports for first year, except pharmaceutical
units where this will be based on its estimated exports for first two
years.
(l) Deleted
Following supplies effected from EOU / EHTP / STP / BTP units will be
counted for fulfillment of positive NFE. Such supplies shall not include
“marble”, except if such supply of marble is an inter unit supply as provided
at Sub - Para(c) below:
(c) Supplies to other EOU / EHTP / STP / BTP / SEZ units, provided that
such goods are permissible for procurement in terms of Para 6.01 of
FTP.
(g) Supplies of items like tags, labels, printed bags, stickers, belts,
buttons or hangers to DTA unit for export.
(h) Supply of LPG produced in an EOU refinery to Public Sector domestic
oil companies for being supplied to household domestic consumers
at subsidized prices under the Public Distribution System (PDS)
Kerosene and Domestic LPG Subsidy Scheme, 2002, as notified by the
Ministry of Petroleum and Natural Gas vide notification No. E-
20029/18/2001-PP dated 28.01.2003 (hereinafter referred to as PDS
Scheme) subject to the following conditions:-
(i) Only supply of such quantity of LPG would be eligible for which
Ministry of Petroleum and Natural Gas declines permission for
export and requires the LPG to be cleared in DTA; and
(a) Supplies from DTA to EOU/EHTP/STP/ BTP units for use in their
manufacture for exports will b e e l i g i b l e for “benefits under
Chapter 7 of FTP”. DTA supplier s h a l l b e e l i g i b l e f o r
r e l e v a n t e n t i t l e m e n t s under chapter 7 of FTP, besides
discharge of export obligation, if any, on the supplier.
The refund of GST paid on such supply from DTA to EOU would be
available to the supplier subject to such conditions and
documentations as specified under GST rules and notifications
issued there under.
(iii) Deleted
(iv) Deleted
(c) Units will be allowed to retain 100% of its export earnings in the
EEFC account.
(d) Unit will not be required to furnish bank guarantee at the time of
import or going for job work in DTA, where:
(f) Deleted
6.14 Sub-Contracting
(ii) These units may sub – contract upto 50% of overall production
of previous year in value terms in DTA with permission of
Customs authorities.
(b) (i) EOU may, with annual permission from Customs authorities,
under take job work for export, on behalf of DTA exporter,
provided that goods are exported directly from EOU and export
document shall jointly be in name of DTA/ EOU. For such
exports, DTA units will be entitled for refund of duty paid on
inputs by way of brand rate of duty drawback. However, such
brand rate of drawback shall be as per Customs and Central
Excise Duties Drawback Rules, 2017 and shall be limited to
Customs duties and Central Excise Duties (in respect of eligible
items covered under Schedule IV of Central Excise Act, 1944).
(a) In case an EOU / EHTP/ STP/BTP unit is unable to utilize goods and
services, imported or procured from DTA,it maybe:
(iii) Exported.
Such transfer from EOU/EHTP/ STP/ BTP unit to another such unit
would be treated as import for receiving unit.
(b) Capital goods and spares that have become obsolete/ surplus, may be
exported or transferred to SEZ unit, transferred to another
EOU/EHTP/STP/BTP/on payment of applicable GST and
compensation cessor disposed of in DTA on payment of applicable
GST and compensation cess and duties of Customs leviable under
First Schedule of the Customs Tariff Act, 1975. Benefit of
depreciation will be available in case of disposal in DTA only when
the unit has achieved positive NFE taking into consideration the
depreciation allowed. No duty shall be payable other than the
applicable taxes under GST laws incase capital goods, raw material
consumables, spares, goods manufactured, processed or packaged,
and scrap/ waste/remnants /rejects are destroyed within unit after
intimation to Customs authorities or destroyed outside unit with
permission of Customs authorities. Destruction as stated above shall
not apply to gold, silver, platinum, diamond, precious and semi-
precious stones.
(c) In case of textile sector, disposal of left over material/ fabrics upto
2% of CIF value or quantity of import, whichever is lower, on
payment of duty on transaction value, may be allowed, subject to
certification of Central Excise/Customs officers that these are left
over items.
(a) EOUs shall be set up with approval of UAC to carry out reconditioning,
repair, remaking, testing, calibration, quality improvement,
upgradation of technology and re-engineering activities for export in
foreign currency. Provisions of paragraphs 6.08, 6.09, 6.10, 6.13, 6.14
of FTP and Para 6.29(a), (b), (c) and (d) of HBP shall not, however,
apply to such activities.
(a) With approval of DC, an EOU may opt out of scheme. Such exit shall
be subject to payment of applicable Excise and Customs duties and
on payment of applicable IGST/ CGST/ SGST/ UTGST and
compensation cess, if any, and industrial policy in force.
(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.
(e) Unit proposing to exit out of EOU scheme shall intimate DC and
Customs authorities in writing. Unit shall assess duty liability
arising out of exit and submit details of such assessment to
Customs authorities. Customs authorities shall confirm duty
liabilities on priority basis, subject to the condition that the unit
has achieved positive NFE, taking into consideration the
depreciation allowed. After payment of duty and clearance of all
dues, unit shall obtain “No Dues Certificate” from Customs
authorities. On the basis of “No Dues Certificate” so issued by the
Customs authorities, unit shall apply to DC for final exit. In case
there is no proceeding pending under FT (D&R) Act, as amended,
DC shall issue final exit order within a period of 7 working days.
Between “No Dues Certificate” issued by Customs authorities and
final exit order by DC, unit shall not be entitled to claim any
exemption for procurement of capital goods or inputs. However,
unit can claim Advance Authorisation / DFIA / Duty Drawback.
Since the duty calculations and dues are disputed and take a long
time, a BG / Bond / Installment processes backed by BG shall be
provided for expediting the exit process.
6.19 Conversion
(a) Existing DTA units may also apply for conversion into an EOU /
EHTP / STP / BTP unit.
(b) Existing EHTP / STP units may also apply for conversion / merger
to EOU unit and vice-versa. In such cases, units will avail
exemptions in duties and taxes as applicable.
(c) 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.
(iii) Export goods for display / sale in permitted shops set up abroad.
Import/ export through personal carriage of gems and jewellery items may
be undertaken as per Customs procedure. However, export proceeds shall
be realized through normal banking channel. Import/ export through
personal carriage by units, other than gems and jewellery units, shall be
allowed provided goods are not in commercial quantity. An authorized
person of Gems & Jewellery EOU may also import gold in primary form,
upto10Kgs in a financial year through personal carriage, as per guidelines
prescribed by RBI and DoR.
i
Amended vide Notification No.55/2015-20 dated 23 March, 2018.
ii th
Amended vide Notification No.10/2015-20 dated 07 June, 2018