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By:Ashfaque Husian Nagpurwala 075Tapas Kolte 149Vikas ShahPayal Choudhary 130Harshita Goel
EOU/EHTP/STP/Biotech Parks
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Export Oriented Units
(EOU's)
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INTRODUCTION ON EOU
Introduced -31stDecember 1980
-by Ministry of Commerce and industry,
Govt. of India
Why?? -To boost exports by creating additional
production capacity
Deciding authority: BoA
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Eligibility
Units undertaking to export their entireproduction of goods and services.
(manufacture, repair, re-make, re-condition, re-engineer, render services.)
+ve Net Foreign Exchange- NFE for 5
years
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Key Points
EOUs can get a location of theirchoice Customs-bondedanywhere in India.
EOUs can import without duties,all capital goods and raw materialsfor running the unit
EOUs can sell up to 50% of FOBvalue of exports in the Indianmarket at concessional duties
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Approvals for EOUs
Trading not permitted.
Minimum Investment for approvalas an EOU should be Rs.10million in plant &machinery
Licenses are required
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Preparation for Registration
Decision on various fronts like type, location etc.
Obtaining environmental clearence
Obtaining bank acc. For foreign exchange
Obtaining sales tax registration Obtaining govt. clearences
Getting PAN number
Getting IE Code
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Procedure Of Registration
1 Documents along with the
application
2 Grant of registration to EOUs
(5 Days)
3 Issue Of Certificate
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1. Documents
Total 6 Documents Required copy of LOP (letter of Permission)
Copy of Private Bonded Warehousing License
issued under section 58 of the Customs Act,
Bank attested signatures of authorized signatoriesof the EOU/EHTP/STP unit.
Passport size photograph of
Director/Proprietor/signatories
Copy of IEC No
Copy of green card
Copy of Legal Agreement For 100%EOU
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Letter of Permission
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Private Bonded Warehousing
License
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Green Card
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Transfer of Goods
Transfer of manufactured goods from one EOU to another isallowed with prior intimation to concerned DC and Customsauthorities
(A)
Capital goods may be transferred or given on loan with priorintimation to concerned Development Commissioner and Customsauthorities.
(B)
Goods supplied by one unit to another shall be treated as importedgoods for second unit for payment of duty, on DTA sale by secondunit.
(C)
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Major Sectors of EOU GRANITE TEXTILES / GARMENTS
FOOD PROCESSING
CHEMICALS
COMPUTER SOFTWARE COFFEE
PHARMACEUTICALS
GEM & JEWELLERY
ENGINEERING GOODS ELECTRICAL & ELECTRONICS
AQUA & PEARL CULTURE
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Inter unit Transfer
Transfer of manufactured goods from one EOU to another isallowed with prior intimation to concerned DC and Customsauthorities.
(A)
Capital goods may be transferred or given on loan to otherEOU with prior intimation to concerned DC & Customsauthorities.
(B)
Goods supplied by one unit of EOU to another unit shall betreated as imported goods.
(C)
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EOUs and Foreign Exchange
EOUs may freely repatriate investment & returns abroad
(A)
EOUs may invoice sales to other EOUs etc in foreignexchange
(B)
EOUs need to bring export proceeds to India only within360 days of export .
(C)
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Exit from EOU
An EOU / EHTP / STP / BTP Unit may also be permitted by DevelopmentCommissioner to exit under Advance Authorization as a one time option.
Unit proposing to exit out of EOU scheme shall intimate DC and Customs and
Central Excise authorities in writing.
An EOU/EHTP/STP/BTP unit may also be permitted by DevelopmentCommissioner, to exit from the scheme at any time on payment of duty on capital
goods under the prevailing EPCG Scheme for DTA Units.
If unit has not achieved obligations, it shall also be liable to penalty at thetime of exit.
With approval of DC, an EOU may opt out of scheme.
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Who can Operate
To run manufacturing activitiesforeign companies need to set up anIndian Company
A Company registered in India can
start an EOU unit without starting anew legal entity: separate accountssuffice.
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Benefits of EOU
No payment of Income Tax
Imports => customs duty free.
No Central Excise on Capital Goods and Raw
Materials from domestic market.
100% of foreign equity is permissible.
Reimbursement of Central Sales Tax
Exemption up to 90% from Income-tax
Full Freedom for sub-contracting.
Exemption from the payment of Electricuty duty.
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Benefits of EOU
Fast Track Clearance Scheme (FTCS) forclearances of imported consignments for EOU.
In certain cases, excise duty payable will be only
50%/30% of normal
100% exemption on sales tax
Job work for exports is permitted
Supplies made to EOU by Indian supplier are
deemed exports No restrictions on managerial remuneration
No restrictions on External Commercial
Borrowings
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EOU 04 V/S 09
Procurement and supply of export promotionmaterial of 1 .5% of FOB value of previous years
exports is allowed.
Goods imported shall be used only for export
production
Time limit for export of Gold/silver/ platinum
jewelry increased from 60 days to 90 days
Procurement and export of spares/components,increased from 1.5% to 5 %
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EOU 04 V/S 09
Sectors other than Gems & Jewellery mayimport/procure 5% FOB(PFY) value without
payment of duty.
units which are manufacturing and exporting
more than one product can sell 90% of FOB ofany of these products into DTA.
Unit will not be required to furnish bank guarantee
at the time of import, where unit has
(i) a turnover of Rs. 5 crores or above
(ii) unit is in existence for at least three years
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Electronic Hardware Technology
Park (EHTPs)
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ABOUT EHTPs
The EHTP Scheme is a 100% Export OrientedScheme for undertaking manufacturing of
electronic hardware equipment/components in
India.
An Electronic Hardware Technology Park (EHTP)may be an individual unit by itself or a unit located
in an area designated as EHTP Complex.
The EHTP Scheme is also administered by the
Ministry of Communications & Information
Technology.
I t b fit
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BENEFITS
GRANTE
DTO
EHTPs.
Import benefits.
Duty free and bonded areas.
Exemption from payment of corporate income tax andalso sales tax reimbursement.
100% foreign equity allowed.
Supplies made by DTAs to EHTPs to be treated asdeemed exports.
EHTP unit maybe setup for both hardware and
software in an integrated manner.
No excise duty levied on purchase of indigenousgoods.
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Minimum Export Obligation
As per the EXIM policy, 2002-07, an EHTP shallbe a net foreign exchange earner.
It is calculated cumulatively for a period of 5
years.
Positive NFE = FOB value of exports-(sum total of
CG imported + value of payments made in foreign
exchange)
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Criteria for automatic approval
The unit shall meet the requirements of thecustom authorities.
It is amenable to bonding by the customs.
All the manufacturing operations are carried out
in the same premises.
However, the unit may be permitted to sub-contract
part of their production process.
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REGISTRATION PROCEDURE
The application for setting up a unit must be dulyfilled with signatures and rubber stamp on each
page of the application.
An application fee of 2500 is to be paid.
The project report must contain details about:
Company profile, promoters background, services
offered, marketing strategy, manpower plan, future
plans, financial statements, finance details,
projected financial statements, export workings.
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REGISTRATION PROCEDURE
The MOA and AOA of the company is to besubmitted.
Once the director acknowledges the receipt of the
application, a reference no is given to each
application.
The applicant is the required to give a
presentation on his B plan in the EHTPI office.
On approval, letter of permission is issued to theunits.
Now, the unit needs to undertake the following:
Execution of legal agreement.
Custom bonding.
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Software Technology Parks
(STPs)
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Bio - Technology Parks
(BTPs)
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