EXPORT ORIENTED UNITS SCHEME:

  


Ø                   Units undertaking to export their entire production of goods and services may set up the Export Oriented Unit Scheme, EHTP, STP or Bio-Technology Park Schemes for manufacture of goods, including repair, re-making, reconditioning, re-engineering, and rendering of services.

Ø                   These units have to obtain approval in the form of Letter of Permission/Letter of Intent from the concerned Development Commissioner of the Export Processing Zone. It is valid for 3 years. Its validity may be extended further upto 3 years. Further extension to be considered on case-to-case basis by the Board of Approval. Once the unit commences production, LOP/LOI is valid for 5 years for its activities. This period is further extended for 5 years by the concerned Development Commissioner. The import entitlement is worked out based on the manufacturing and export programme and is attested by the concerned DC. Customs duty is exempt on import of all goods.

Ø                   Investment is to be Rs.1 Crore and above in plant and machinery.

Ø                   These units shall be positive net foreign exchange earner. NFE is to be calculated cumulatively in blocks of five years, starting from the commencement of production.

Ø                   Can import or procure from domestic sources, free of duty all their requirements of capital goods, raw material, consumables, spares, packaging material, office equipment, DG Sets, etc. Anti-dumping duties are exempt. Domestic procurement is free from state levies including CST.

Ø                   Are eligible for concessions in respect of payment of Income Tax.

Ø                   Can achieve Export Performance and NFEP cumulatively over a period 5 years. No penal action for shortfalls during the first three years of operation.

Ø                   Can clear goods upto 50% of the value of exports in the domestic area on concessional duty. Sales beyond this limit can be made on full duty.

Ø                   Can supply to other EOU, etc. without payment of duty and such supplies are counted towards fulfillment of Export Performance.

Ø                   Supplies from the domestic tariff area to EOU are allowed Deemed Export benefit.

Ø                   Can procure duty free inputs for supply of manufactured goods to advance licence holders.

Ø                   Are exempt from industrial licensing for manufacture of items reserved for small scale industrial sector.

Ø                   Can repatriate their profits freely without any dividend-balancing requirement.

Ø                   Are permitted 100% Foreign Direct Investment through automatic approval route except for few sectors.

Ø                   3 copies of the Project proposal in Appendix 14-A of the Handbook to be submitted to the concerned Development Commissioner.