EOUs and SEZs

8/8/2019 EOUs and SEZs

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By - SUNNY SHARMA


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AttractForeign DirectInvestment (FDI)

Earn foreign exchange and contribute to exchangerate stability

Boostthe exportsector, particularlynontraditional

exports Create jobsand raise standard of living

Transfernew skillsand expertise to localhumanresources

Create backward & forward linkagesto increase theoutputand raise the standard of local enterprise thatsupplygoodsand servicesto the zone

Introduce new technology

Develop backward regionsbylocatingsuch zonesinthese areasand attractingindustries

Provide astimulusto the economy


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Developersubmitsthe proposalto the state

govt

State govt forwardsitto Board of

Approval(BOA) BOAconstituted bythe centralgovt.

Itsheaded bythe secretary, Department of

Commerce.

Approvalatthe zonallevel deals withthe

unitclearancesand otherissues

Approvalgivenby Development

Commissioner.


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Year Value

(Rs. Crore)

Growth Rate (over

previous year)

2003-2004 13,854 39%

2004-2005 18,314 32%

2005-2006 22 840 25%

2006-20007 34,615 52%

2007-2008 66,638 92%

2008-2009 99,689 50%

2009-2010 2,20,711.39 121.40%


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Nokia SEZ inTamilNadu

Quark City SEZ in Chandigarh

Flextronics SEZ inTamilNadu

ahindra World CityinTamilNadu

otorola, DELL and Foxconn

Apache SEZ (Adidas Group)inAndhra Pradesh

Divvy's Laboratories,Andhra Pradesh ajiv GandhiTechnology Park, Chandigarh

ETL Infrastructure IT SEZ, Chennai

yderabad Gems Limited, yderabad


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Growthand development

AttractsFDI

Exposure to technologyand global markets

Increase in GDP and economic model

Employment opportunitiesare created


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Exploitation of laborers

Women exposed to sexualharassment

Loss of revenue for Government

Fertile landsbeing used for establishing

industrial units


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To increase exports

To earn foreign exchange

pgrade laborand managementskills

To stimulate foreign directinvestment

To generate additional employment.

To acquire higherlevel of technologicaland

industrial progress


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Application forsetting up,to be made to-

Board of approval (BOA) forapprovals of units

inservice sector

Development Commissioner (DC) for EOUsrequiringindustriallicensing,aftergetting

clearance from Board of Approval (BOA) &

Department of Industrial Policy & Promotion

(DIPP) within 45 days

UnitsApproval Committee (UAC) forOTHE units


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YearEOUsExport (InRs Crores)

EOUs'ExportGrowthRate %over prev.

year

India'sExports

India'sExportGrowthRate %overprev.

year

EOUs' %shareofIndia'sexport

EOUs'Imports

NFE byEOUs

NFE as%age ofExport

1999-2000

13701.29 13.63 159561 14.2 8.59 3014.70 10686.59 78.00

2000-01 15912.00 16.14 203571 27.6 7.82 3659.01 12252.99 77.00

2001-02 18743.45 17.79 209018 2.7 8.97 5940.81 12802.64 68.30

2002-03 23590.60 25.86 255137 22.06 9.25 6973.00 16617.60 70.44

2003-04 28827.58 22.20 293367 14.98 9.83 9928.00 18899.58 65.56

2004-05 39228.40 36.08 375340 27.94 10.45 16692.11 22536.29 57.45

2005-06 49462.35 26.09 456418 21.60 10.84 30485.96 18976.39 38.37

2006-07 69964.60 41.45 571779 25.28 12.24 #

EF! #

EF! #

EF!

2007-08 168838.78 141.32 655863 14.71 25.74 108209.59 60629.19 35.91

2008-09 164152.18 -2.78 766935 16.94 21.40 #

EF! #

EF! #

EF!


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SEZ EOU

Itisageographical

regionthathaseconomiclawsthat

are liberalthana

country'stypical

economiclaws.

Itiscomplementary

to a SEZ. It offersawide optionin

locations with

reference to factors

like source of raw

materials, ports ofexport,availability of

technologicalskills

and many otherskills.


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SEZ EOU

Itisa well defined

geographicalregion orenclave.

Itisstandalone unit


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SEZ EOU

SEZ unithasto be

located withinthespecified zones

developed

EOU unitcanbe set-

up atany placedeclared as

"warehousingstation"

under CustomsAct.

There are 300 such

placesall overIndia.


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SEZ EOU

There isno suchlimit

for SEZ.

inimum investment

in plantandmachinery,and

buildingis s 100

lakhs for EOU.


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SEZ EOU

SEZsare generally

opento allactivities.Itgenerally focuses

on manufacturing,

servicesand trading

activities

EOUs focuses on

manufacturing,servicing,

development of

software,trading,

repair,remaking,re-

engineeringincludingmaking of gold/silver

jewelleryand articles

thereof,agriculture.


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SEZ EOU

100% FDIisallowed

automatically foranufacturing SEZ

Units

FIPBapproval

required as persectoralguideline.


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SEZ EOU

Companiesin SEZs

enjoya 5 yearcorporate tax holiday,

followed by 50%

exemption forFurther

5 years, u/s 10A .

Even exemption from115JB

Tax Holidaysare

allowed forrawmaterialsand capital

goodsin EOUs.


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SEZ EOU

Customsclearance for

exportand importisobtained withinthe

zone itself.

FastTrack Clearance

Scheme (FTCS) forclearances of

imported

consignments for EOU

(Depending onits

export performanceforlast 3 years)


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SEZ EOU

Generally

infrastructure

available to SEZ unit

are muchbetteras

available to other

units

Infrastructure

available to EOU unit

are notasbetteras

available to SEZ units


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SEZ EOU

Service Tax on

services provided to

SEZ are exempted.

Service tax on

services provided to

EOUisnot exempted,

butif unit paysin

foreign exchange,

service tax willbe

exempted.


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SEZ EOU

Incase of SEZ unit,

supplier doesnot

have to pay CST.

Central SalesTax

(CST) paid on

purchasesis

refundable (butnot

localtax).


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SEZ EOU

No routine

examination of

import/exportcargo

by Customs.

There isno physical

supervision of

customs/excise

authorities over

productionand

clearances,but

prescribed recordsare required to be

maintained.


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SEZ EOU

Exit onlyby physical

removal from the

Zone.

Exit on payment of

applicable duties.


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EOUs and SEZs

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