TMI BlogEXPORT ORIENTED UNITS (EOUs), ELECTRONICS HARDWARE TECHNOLOGY PARKS (EHTPs), SOFTWARE TECHNOLOGY PARKS STPs) SCHEME AND BIO-TECHNOLOGY PARKS(BTPs)X X X X Extracts X X X X X X X X Extracts X X X X ..... y be granted by DC after clearance by Board of Approval (BoA). 6.3.3 Proposals for setting up EOU requiring industrial licence may be granted approval by DC after clearance of proposal by BoA (as per Appendix 14-I-D) and Department of Industrial Policy and Promotion (DIPP) within 45 days on merits. 6.3.4.1 STP / EHTP complexes can be set up by Central Government, State Government, Public or Private Sector Undertakings or any combination thereof, duly approved by Inter-Ministerial Standing Committee (IMSC) in Ministry of Communication and Information Technology (Department of Information Technology). Application for setting up EHTP / STP unit shall be in format prescribed by Ministry of Communication and Information Technology (Department of Information Technology - DoIT) and shall be submitted to officer designated by DoIT. 6.3.4.2 BTP can be set up by Central Government, State Government, Public or Private Sector Undertakings or any combination thereof. Application for setting up of BTP shall be submitted to Department of Bio-Technology (DoBT) and such applications which meet guidelines prescribed by DoBT will be approved and recommended to DGFT for notification. Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Us shall be permitted to export jewellery on basis of a notional rate certificate issued by nominated agency. This rate will be based on prevailing Gold / US$ rate and US$ / INR rate in notional rate certificate. Certificate issued by nominated agency should not be older than 5 [7 working days] of date of shipment. 6.5.3 Exporter shall have flexibility to fix price and repay gold loan within 180 days from date of export. Price shall be communicated to nominated agencies who will issue a certificate showing final confirmation of rate to bank negotiating 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 value of imported or indigenously procured goods to DTA against 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 DTA shall include: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported tea shall be utilized within a period of 6 months from date of import. Similarly, export obligation against import of items {covered by Chapter 9 of ITC(HS)} and coconut oil shall be fulfilled within a period of 90 days from the date on which first import consignment is cleared by Customs Authorities. 2 [However, in case of import of spices for VA purpose like crushing/grinding/sterilization or for manufacture of oils and oleoresins of pepper, cardamom and chillies (and not for simple cleaning, grading, repacking etc.), EO shall be fulfilled within 120 days from the date of importation of first consignment. In case of import of spices (other than pepper, cardamom and chillies) for manufacture of spice oils and oleoresins, EO shall be fulfilled within 12 months.] 8 [ However, for imports completed up to 31.12.2008, Export Obligation Period (EOP) shall be 150 days from the date of clearance. ] (d) Goods already imported / shipped / arrived before issue of LoP / LoI are also eligible for duty free clearance under EOU / EHTP / STP / BTP scheme, provided customs duty has not been paid and goods have not been cleared from Customs. (e) Consumption of inputs by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Net Foreign Exchange; 'A' is FOB value of exports by EOU/EHTP/STP/BTP unit; 'B' is sum total of CIF value of all imported inputs and CIF value of all imported capital goods, and value of all payments made in foreign exchange by way of commission, royalty, fees, dividends, interest on external borrowings / high sea sales during first five year period or any other charges. It will also include payment made in Indian Rupees on high sea sales. "Inputs" mean raw materials, intermediates, components, consumables, parts and packing materials. 6.10.2 If any goods are obtained from another EOU / EHTP / STP / SEZ / BTP unit, or procured from an international exhibition held in India, or bonded warehouses or precious metals procured from nominated agencies, value of such goods shall be included under 'B'. 6.10.3 If any capital goods are imported duty free or leased from a leasing company, received free of cost and / or on loan basis or transfer, CIF value of capital goods shall be included pro-rata, under 'B' for period it remains with units. 6.10.4 For annual calculation of NFE, value of imported capital goods and lumpsum payment of foreign technical know-how fee shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such DTA sales shall not affect application, to any goods, of any other prohibition or regulation affecting import thereof in force at the time, when such goods are imported. This also does not confer any immunity, exemption or relaxation at any time from any commitment or compliance with any requirements to which importer may be subject to under other laws or regulations. Supplies to other EOU/EHTP/STP/ SEZ/BTP units 6.15 Supplies to other EOU / SEZ / EHTP / STP / BTP units shall be counted towards NFE provided that such goods are permissible for procurement by these units. Transfer of Power from one unit to another 6.16 Transfer of power from Captive Power plants (DG Sets) from one unit of EOU / EHTP / STP / BTP to another is permitted as prescribed in sector specific condition in Appendix 14-I-C. Supply of precious / semiprecious / Synthetic stones from DTA 6.17 Supplier of precious and semi-precious stones, synthetic stones and processed pearls from DTA to EOUs shall be eligible for grant of Replenishment Authorisation at rates and for items mentioned in HBP v1. Procedure for submission of application for grant of Replenishment Authorisation as contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comply with direction of Supreme Court contained in its order dated 12.12.1996 in Writ (civil ) No 202 of 1995 -T.N. Godavarman Thirrumulppad v/s Union of India and others with WP(Civil) No 171 of 1996 in regard to use of timber / other wood. Sub-Contracting 6.21.1 Sub-contracting by EOU gems and jewellery units through other EOUs, or SEZ Units, or units in DTA, shall be subject to following conditions:- (a) Goods, finished or semi finished, including studded jewellery, taken out for sub- contracting shall be brought back to unit within 90 days. (b) No cut and polished diamonds, precious and semiprecious stones (except precious, semi-precious and synthetic stones having zero duty) shall be allowed to be taken out for sub-contracting. (c) Receive plain gold / silver / platinum jewellery from DTA / EOU / SEZ units in exchange of equivalent quantity of gold / silver / platinum, as case may be, contained in said jewellery. (d) EOUs shall be eligible for wastage as applicable as per para 4A.2 of HBP v1 for sub-contracting and against exchange. (e) DTA unit undertaking job work or supplying jewellery against exchange of gold / silver / platinum shall not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... least two years and engaged in export of agriculture / horticulture /aquaculture products; otherwise it shall furnish bank guarantee equivalent to duty foregone on capital goods /inputs proposed to be taken out to Deputy / Assistant Commissioner of Customs / Central Excise, till unit completes two years. Export through Exhibitions/Export Promotion tour 6.23 EOU / EHTP / STP / BTP units may export goods for holding / participating in exhibitions abroad, with permission of DC, subject to following conditions:- (a) Unit shall produce to Customs authorities letter in original, or its certified copy containing approval of DC. For gems and jewellery items, a self-certified photograph of products shall also be submitted. (b) In case of re-import, such items, on arrival shall be verified along with export documents before clearance. (c) Items not sold abroad shall be re-imported within 60 days of close of exhibition. However, in case exporter is participating in more than one exhibition within 45 days of close of first exhibition, then 60 days shall be counted from date of close of last exhibition. (d) In case of personal carriage of goods and for holding/ participating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank Certificate of Export and Realisation. 6.27.4 Procedure for personal carriage of import parcels will be same as for import of goods by airfreight except that parcels shall be brought to Customs by EOUs / foreign national for examination and release. Instructions issued by Customs authorities in this regard should be followed mutatis mutandis. 6.27.5 Personal carriage of parts by foreign bound passengers shall be allowed in case same are required for repairs of exported goods at customer site. Following documents should be submitted as proof of exports:- (a) Permission letter from Customs for exports. (b) Invoice with value (for payment or free of charge). Replacement / Repair of imported / indigenous goods 6.28.1 Units may send capital goods abroad for repair with permission of Customs authorities. Any foreign exchange payment for this purpose will also be allowed. However, no permission will be required for sending capital goods for repair within country. 6.28.2 EOU / EHTP / STP / BTP units may, on basis of records maintained by them and prior intimation to Customs authorities:- (a) Transfer goods to DTA / abroad for repair / replacement, testing or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government or, Government of a State or, a Union Territory or a local body, or an organization of Central Government or, a Government of a State or, a Union Territory as per Customs / Central Excise notification. Destruction of goods 6.31 No duty shall be payable in case capital goods, raw material, consumables, spares, goods manufactured, processed or packaged, and scrap / waste / remnants / rejects are destroyed within Unit after intimation to Custom 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. Distinct Identity 6.32 If an industrial enterprise is operating both as a domestic unit as well as an EOU / EHTP / STP / BTP unit, it shall have two distinct identities with separate accounts, including separate bank accounts. It is, however, not necessary for it to be a separate legal entity, but it should be possible to distinguish imports and exports or supplies affected by EOU / EHTP / STP / BTP units from those made by other units of enterprise. Unit Approval Committee for EOUs 6.33.1 Powers an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacture; (6) Authorize change in name of company or implementing agency and change from a company to another provided new implementing agency / company undertakes to take over assets and liabilities of existing unit; (7) Permit change of location from place mentioned in LoP to another and / or include additional location provided that no change in other terms and conditions of approval is envisaged and that new location is within territorial jurisdiction of DC / Designated Officer; (8) Extend validity period of LoP by three years beyond initial validity period of LoP (except in case where there is a restriction on initial period of approval, like setting up of oil refinery projects); (9) Cancel LoP wherever warranted; (10) Permit merger of two or more units into one unit provided units fall within jurisdiction of same DC / Designated Officer subject to conditions that activities are covered under provision of broad banding; (11) Exercise powers of adjudication under Section 13 read with Section 11 of FT (D R) Act, in respect of EOUs as mentioned in Gazette Notification No. SO. 194(E) dated 6.3.2000; (12) Do valuation of exports declared on SOFTEX form by EOUs as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry quarter in fourth and fifth year, 2% for every quarter thereafter. Conversion 6.37.1 Existing DTA units, may also apply for conversion into an EOU /EHTP / STP / BTP unit, but no concession in duties and taxes would be available under scheme for plant, machinery and equipment already installed. On conversion, they would get Income Tax concessions but limited to period of 10 year from original commencement of manufacture or that prescribed under Section 10 of Income Tax Act whichever is earlier. For this purpose, DTA unit may apply to DC / Designated Officer concerned in same manner as applicable to new units. In case there is an outstanding export commitment under EPCG scheme /Advance Authorization Scheme, it will follow the procedure laid down in Appendix 14-IO of HBP v1. 6.37.2 Existing EHTP / STP / BTP units may also apply for conversion / merger to EOU unit and vice-versa. In such cases, units will continue to avail permissible exemption in duties and taxes as applicable under relevant scheme. EHTP / STP / BTP units desiring conversion as an EOU may apply to DC concerned through Officer designated by DoIT / DoBT in same manner as applicable to new units. Lik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / Central Excise. Activities which do not require permission 6.39.9 In respect of following activities of a status holder, permission will not be required from DC or jurisdictional Central Excise authority: DTA sale of finished products in terms of para 6.8(a) of FTP; Participation in exhibition and Personal carriage of Gems Jewellery for export promotion tours subject to fulfillment of conditions of para 6.24 of HBP v1. However, prior intimation thereof needs to be given. Time bound disposal of applications 6.40 DC shall dispose off applications expeditiously. Following time schedule shall normally be followed to dispose of applications provided application is complete in all respects and is accompanied by prescribed documents. S. No Category of Application Time limit for disposal (days) 1 Issue of LoP / LoI 15 2 Conversion of LoP / LoI 15 3 Acceptance of LUT 3 4 Renewal of LUT 3 5 Permission for broad banding / diversification 3 6 Permission for change in locations 7 7 Permission for Advance DT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tituted vide Public Notice No. 53/(RE: 2008)/2004-2009 dated 23/7/2008 before it was read as, "Net Foreign Exchange (NFE) Earnings shall be calculated cumulatively for a block of five years from commencement of production according to formula given below." 4. Has been substituted vide Public Notice No 58/2008 dated 5/8/2008 before it was read as, "6.35 Clearance of Capital Goods including second hand in DTA shall be allowed as per FTP under EPCG Scheme. In other cases, clearance in DTA may be allowed on payment of applicable duty and Import Policy in force on date of such clearance." 5. For the words and figure "3 working days" has been substituted by the words and figure "7 working days" vide Public Notice No. 92/(RE 2008) 2004-09 dated 13/10/2008 6. Substituted vide Public Notice No.138/(RE-2008) 2004-09, dated 23/01/2009 , before it was read as:- On completion of approval period as provided for in paragraph 6.6 of FTP, it shall be open to unit to continue under scheme or opt out of scheme. If no intimation in this regard is received from unit within a period of six months of expiry of approval period, DC will take action, suo moto, to cancel approval under EOU sche ..... X X X X Extracts X X X X X X X X Extracts X X X X
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