Chapter6 EXPORT ORIENTED UNITS (EOUs), ELECTRONICS HARDWARE TECHNOLOGY PARKS (EHTPs) , SOFTWARE TECHNOLOGY PARKS (ST
06 September 2004
Applications for setting up of units under EOU scheme other than proposals for setting up of unit in the services sector (except R&D, software and IT enabled services, or any other service activity as may be delegated by the BOA), shall be approved or rejected by the Units Approval Committee within 15 days as per the criteria indicated in Appendix-14-IB and sector specific conditions relating to the approval given in Appendix-14-IC. In other cases, approval may be granted by the Development Commissioner after clearance by the Board of Approval.
6.3.3
Proposals for setting up EOU requiring industrial licence may be granted approval by the Development Commissioner after clearance of the proposal by the Board of Approval (as per Appendix-14-ID) and Department of Industrial Policy and Promotion within 45 days on merits.
6.3.4.1
Software Technology Park (STP)/Electronics Hardware Technology Park (EHTP) complexes can be set up by the Central Government, State Government, Public or Private Sector Undertakings or any combination thereof, duly approved by the Inter-Ministerial Standing Committee (IMSC) in the Ministry of Communication and Information Technology (Department of Information Technology).
Application for setting up EHTP/STP unit shall be in the format prescribed by the Ministry of Communication and Information Technology (Department of Information Technology) and shall be submitted to the officer designated by the Department of Information Technology.
6.3.4.2
Bio Technology Park (BTP) can be set up by the Central Government, State Government, Public or Private Sector Undertakings or any combination thereof.
Application for setting up of BTP shall be submitted to the Department of Bio Technology and such applications which meet the guidelines prescribed by the Department of Bio Technology will be approved and recommended to the DGFT for notification . Application for setting up of BTP unit shall be submitted to the Officer designated by the Department of Bio Technology.
6.3.6
The LOP/LOI shall specify the item(s) of manufacture/service activity, annual capacity, projected annual export for the first five years in dollar terms, Net Foreign Exchange earnings (NFE), limitations, if any, regarding sale of finished goods, by-products and rejects in the DTA and such other matter as may be necessary and also impose such conditions as may be required.
6.3.7
LOP/LOI issued to EOU/EHTP/STP/BTP units by the concerned authority would be construed as a licence for all purposes. Standard format for LOP for EOU units is given in Appendix 14-IE .
6.3.8
EOUs shall have separate ear-marked premises for separate LOP. Similarly, EOUs may be approved on leased premises provided the lease has been obtained from Government Department/ Undertaking/Agency. However, in case lease is obtained from private parties, it shall have a validity period of five years from the date of LUT and the Development Commissioner shall satisfy himself of genuine nature of the lease.
6.3.9
On completion of the approval period as provided for in paragraph 6.6 of Policy, it shall be open to the unit to continue under the scheme or opt out of the scheme. If no intimation in this regard is received from the unit within a period of six months of expiry of the approval period, the Development Commissioner will take action, suo moto, to cancel the approval under the EOU scheme and take further action in this regard. Where the unit opts to continue, the Development Commissioner concerned will extend the approval period.
Legal Undertaking
6.4.1
The approved EOU/EHTP/STP/BTP unit shall execute a legal undertaking with the Development Commissioner/Designated Officer concerned as per the format given in Appendix- 14-IF.
6.4.2
All EOUs/EHTP/STP/BTP should have permanent e.mail address . No LUT for new units shall be executed unless the unit has its permanent e-mail address and digital signature on the said e-mail ID. In the event of an EOU not having permanent e-mail address and digital signature, further imports and DTA sale shall not be permitted by the Development Commissioner.
Export of goods and services
6.5.1
Software units may undertake exports using data communication links or in the form of physical exports (which may be through courier service also), including export of professional services
6.5.2
The EOUs shall be permitted to export jewellery on the basis of a notional rate certificate issued by the nominated agency. This rate will be based on the prevailing Gold/US$ rate and the US$/INR rate in the notional rate certificate. The certificate issued by the nominated agency should not be older than 3 working days of the date of shipment.
6.5.3
The exporter shall have the flexibility to fix the price and repay the gold loan within 60 days from the date of export. The price shall be communicated to the nominated agencies who will issue a certificate showing the final confirmation of the rate to the bank negotiating the document, to ensure export proceeds are realized at this rate
6.5.4
Gem & Jewellery and Jewellery EOUs may re-export imported goods and export domestically procured goods, including goods generated out of partial processing/ manufacture. Besides, supply of unsuitable/ broken cut and polished diamonds, precious and semi-precious stones upto 5% of the value of imported or indigenously procured goods to the DTA against the valid Gem & Jewellery REP as applicable on payment of appropriate duty is also permitted.
Import /domestic procurement of goods
6.6.1
Goods permitted to be imported /procured from Domestic Tariff Area shall include:
| (a) | Raw materials, components, consumables, intermediates, spares and packing materials: | ||||||||||||||
| (b) | Capital goods, whether new or second-hand, including inter-alia the following and their spares:
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| (c) | Raw material for making capital goods for use within the unit | ||||||||||||||
| (d) | others including:
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| (e) | Spares and consumables for all the above items | ||||||||||||||
| (f) | any other items not mentioned above with the approval of Board of Approval. |
6.6.2
EOUs may import plain/studded gold/platinum or silver jewellery for export after repairs/remaking.
Conditions of Import
6.7
The import of goods by EOU/EHTP/STP/BTP units shall be subject to the following conditions:
| (a) | The goods shall be imported into the EOU/EHTP/STP/BTP premises. However, agriculture and allied sectors and granite sector units in EOU may supply/ transfer the capital goods and the inputs in the farms/fields/quarries with prior intimation to the jurisdictional Customs/ Central Excise authorities, provided the ownership of the goods rests with EOU units. |
| (b) | The procedure as prescribed under Customs/Excise rules for EOUs and units in EHTP/STP/BTP will be followed and appropriate bond executed with Customs/ Excise authorities |
| (c) | The goods, except capital goods and spares, shall be utilised by EOU/EHTP/STP/BTP units within a period of three years or as may be extended by Customs authorities. |
| (d) | Goods already imported/shipped/arrived before the issue of LOP/ LOI are also eligible for duty free clearance under the EOU/EHTP/STP/BTP scheme provided customs duty has not been paid and the goods have not been cleared from Customs. |
Fax machines/lap- top computers outside approved premises
6.8.1
EOU/EHTP/STP/BTP units may install one fax machine at a place of its choice, outside the premises of the unit, subject to intimation of its location to the concerned Customs/Central Excise authorities.
6.8.2
EOU/EHTP/STP/BTP units may, temporarily take out of the premises of the unit duty free laptop computers and video projection systems for working upon by authorised employees.
6.8.3
EOU/EHTP/STP/BTP units may install personal computers not exceeding two in number, imported/procured duty free in their registered/administrative office subject to the guidelines issued by Department of Revenue in this behalf.
6.8.4
For IT and IT enabled services, persons authorized by the software units may access the facility installed in the EOU/EHTP/STP/BTP unit through communication links
Leasing of Capital Goods
6.9
The value of imported capital goods financed through leasing companies or obtained free of cost and/or on loan/lease basis shall also be taken into account for the purpose of calculation of NFE as defined in the Policy.
Net Foreign Exchange Earnings (NFE)
6.10.1
EOU/EHTP/STP/BTP unit shall be a positive net foreign exchange earner. Net Foreign Exchange Earnings (NFE) shall be calculated cumulatively for a block of five years from the commencement of production according to the formula given below. Items of manufacture for export specified in the Letter of Permission (LOP)/ Letter of Intent (LOI) alone shall be taken into account for calculation of NFE.
Positive NFE = A – B > 0
Where
