Eou 120807043027-phpapp01 (1)

M. S. Chhajed & Co. 1

6, “MAHARSHI” COMPLEX,6, “MAHARSHI” COMPLEX,

SADAR PATEL COLONY,SADAR PATEL COLONY,

NR. UNDER BRIDGE,NR. UNDER BRIDGE,

AHMEDABAD-380014.AHMEDABAD-380014.

INDIA.INDIA.

(M) +91- 98245 19940(M) +91- 98245 19940

(O) +91- 79 2768 1330/1793(O) +91- 79 2768 1330/1793

E-Mail: E-Mail: [email protected]

Skype: Skype: mahesh.chhajedmahesh.chhajed

mailto:[email protected]


The EOU scheme is, at present, governed by the provisions of Export and The EOU scheme is, at present, governed by the provisions of Export and Import (EXIM) Policy.Import (EXIM) Policy. The Export Oriented Units (EOUs) scheme, introduced The Export Oriented Units (EOUs) scheme, introduced in early 1981, is complementary to the SEZ scheme. It adopts the same in early 1981, is complementary to the SEZ scheme. It adopts the same production regime but offers a wide option in locations with reference to production regime but offers a wide option in locations with reference to factors like factors like

• Source of raw materials,Source of raw materials,• Ports of export, Ports of export, • Hinterland facilities, Hinterland facilities, • Availability of technological skills, Availability of technological skills, • Existence of an industrial baseExistence of an industrial base• Need for a larger area of land for the project. Need for a larger area of land for the project.


The main objectives of the EOU scheme is:The main objectives of the EOU scheme is:

• To increase exportsTo increase exports

• Earn foreign exchange to the countryEarn foreign exchange to the country

• Transfer of latest technologies stimulate direct foreign Transfer of latest technologies stimulate direct foreign investment investment

• Generate additional employment.Generate additional employment.


• Units are exempted from payment of Income Tax upto the year 31-03-2011. Units are exempted from payment of Income Tax upto the year 31-03-2011.

• All the imports to units are customs duty free .All the imports to units are customs duty free .

• Exemption from Central Excise Duty for the procurement of Capital Goods and Raw Exemption from Central Excise Duty for the procurement of Capital Goods and Raw Materials from domestic market. Materials from domestic market.

• Units are entitled to sell the product in local market upto 50% of the products Units are entitled to sell the product in local market upto 50% of the products exported in value terms. exported in value terms.

• 100% of foreign equity is permissible.100% of foreign equity is permissible.

• Reimbursement of Central Sales Tax paid on domestic purchases. Reimbursement of Central Sales Tax paid on domestic purchases.

• No restrictions on External Commercial Borrowings. No restrictions on External Commercial Borrowings.

• Exemption from paying electricity duty.Exemption from paying electricity duty.

• Supplies made to EOU by Indian supplier are ‘deemed exports' and supplier is Supplies made to EOU by Indian supplier are ‘deemed exports' and supplier is entitled to benefits of ‘deemed export'. entitled to benefits of ‘deemed export'.


• Fast Track Clearance Scheme (FTCS) for clearances of imported consignments for Fast Track Clearance Scheme (FTCS) for clearances of imported consignments for EOU. EOU.

• Sub-contracting to DTA units permissible after obtaining permission on annually.Sub-contracting to DTA units permissible after obtaining permission on annually.

• Unutilized raw material can be disposed of on payment of applicable duties.Unutilized raw material can be disposed of on payment of applicable duties.

• The unit can exit (de-bond) with permission of Development Commissioner, on The unit can exit (de-bond) with permission of Development Commissioner, on payment of applicable duties. payment of applicable duties.

• Prescribed percentage of foreign exchange earnings can be retained in EEFC Prescribed percentage of foreign exchange earnings can be retained in EEFC account in foreign exchange. account in foreign exchange.

• EOUs are free to select the location of a project.EOUs are free to select the location of a project.

• EOUs EOUs can export through an export house/trading house/star trading house or can export through an export house/trading house/star trading house or other EOUs.other EOUs.


• Minimum investment before production of Rs.10 mn in building, plant and Minimum investment before production of Rs.10 mn in building, plant and machinery (not applicable for STP/EHTP/BTP units etc.). machinery (not applicable for STP/EHTP/BTP units etc.).

• The entire production and operation of 100 % EOUs must be in a customs bonded The entire production and operation of 100 % EOUs must be in a customs bonded factory. factory.

• An approved EOU will execute a bond/legal undertaking. Failure to fulfill the An approved EOU will execute a bond/legal undertaking. Failure to fulfill the obligations stipulated liable to penalty. obligations stipulated liable to penalty.

• Separate account for DTA and EOU units.Separate account for DTA and EOU units.• Maintain proper account of the imports, consumption and utilization of all Maintain proper account of the imports, consumption and utilization of all

imported materials and exports.imported materials and exports.• Rejects upto 5% of F.O.B. value can be sold in DTA.Rejects upto 5% of F.O.B. value can be sold in DTA.• No export benefits like cash assistance, license.No export benefits like cash assistance, license.• Proposed EOU on lease land having agreement of atleast 5 yearsProposed EOU on lease land having agreement of atleast 5 years..• Positive NFE is mandatory.Positive NFE is mandatory.


The EOU/promoter has to apply in Appendix 14-I-A , with The EOU/promoter has to apply in Appendix 14-I-A , with • Project Report should contain nature of business, annual capacity, business Project Report should contain nature of business, annual capacity, business

projections for 5 years, details of import raw materials and capital goods, floor projections for 5 years, details of import raw materials and capital goods, floor plan, .plan, .

• IEC numberIEC number• PAN and TANPAN and TAN• ResolutionResolution• Directors/ Promoters brief profile and resumeDirectors/ Promoters brief profile and resume• Returns of previous 3 years and residential proof of Promoters/ DirectorsReturns of previous 3 years and residential proof of Promoters/ Directors• DD for Rs.5,000 DD for Rs.5,000 • A copy of the Certificate of Incorporation and Memorandum and Articles of A copy of the Certificate of Incorporation and Memorandum and Articles of

Association in case of companies/ attested copy of registered Partnership Association in case of companies/ attested copy of registered Partnership deed.deed.

• Copy of lease deed of the premises valid for atleast 5 years.Copy of lease deed of the premises valid for atleast 5 years.


After submitting the application form and if every thing is in order, Letter of After submitting the application form and if every thing is in order, Letter of Permission (LOP) is issued by the Zone Administration within 2 weeks after Permission (LOP) is issued by the Zone Administration within 2 weeks after interview of the promoter by the Approval Committee. LOP shall have an initial interview of the promoter by the Approval Committee. LOP shall have an initial validity of 3 years by which time the unit should have commenced production. validity of 3 years by which time the unit should have commenced production. Its validity may be further extended to 3 years by competent authority LOP will Its validity may be further extended to 3 years by competent authority LOP will contain following details:contain following details:

• Items of manufacture/service activityItems of manufacture/service activity• Annual capacity Annual capacity • Projected annual export for the first five years in dollar termsProjected annual export for the first five years in dollar terms• Net Foreign Exchange Earnings Net Foreign Exchange Earnings • Limitations, if any regarding the sale of finished goods, by products and rejects Limitations, if any regarding the sale of finished goods, by products and rejects

in the DTA in the DTA • Such other matter as may be necessary Such other matter as may be necessary • Conditions as may be required Conditions as may be required


• Approval from custom for duty free import and excise free procurement of indigenous goods and raw material and capital goods required for manufacturing finished goods in Bonded warehouse u/s 58 & 65 of Customs Act, 1962.

• Application form - 4 copies Approval from STPI to set up 100% EOU• Copy of TAX ID Copy of Importer Exporter Code Copy of Application filed with STPI for

set up of EOU• Banker's Certificate about the satisfactory account maintenance Lease Deed of the

premises to be Customs bonded• Floor plan - 4 copies duly attested by the CEO / authorised signatory • B-17 bond to be executed by the Company to set up a Private bonded warehouse for

an amount of 12.5% of the Capital goods to be imported • Bank Guarantee to be provided by the Company for a value of 5% of the value as

indicated in B-17 bond Copy of the Memorandum & Articles of association of the Company

• The warehousing license issued to the EOUs and STP/EHTP units would be valid for a period of five years.


Existing DTA units or EPCG units are permitted for conversion into EOU Scheme. If the unit is having outstanding export commitment under the Advance Licensing Scheme, it will discharge the same as well, as per its conditions before conversion into EOU Scheme. However, duties of Customs and Central Excise already suffered shall not be refunded on conversion into EOU.


The EOUs ( other than gems & jewellery units) are allowed to sell goods The EOUs ( other than gems & jewellery units) are allowed to sell goods (including rejects and byproducts) manufactured by them in DTA upto 50% of (including rejects and byproducts) manufactured by them in DTA upto 50% of FOB value of exports on payment of concessional duty subject to achievement of FOB value of exports on payment of concessional duty subject to achievement of prescribed NFEP.prescribed NFEP.


For further information contact us at:For further information contact us at:

[email protected]

www.mschhajedandco.com

Thanking You…Thanking You…

mailto:[email protected]

http://www.chhajedconsultants.com/

Eou 120807043027-phpapp01 (1)

Government & Nonprofit

Transcript of Eou 120807043027-phpapp01 (1)