25 February 2011
Let me tell you some facts about a 100 % EOU: The Company (EOU) during its initial 5 year period made exports to the tune of 40 lacs but till the end of its 4 th year never made any duty free import of raw materials. The exported products were made out of raw materials purchased from India after paying applicable duties and taxes. But during the end of the 5th year, the company made duty free import to the Tune of 52 lacs and thus resulted in a negative NFE. The Director STPI rejected its application for renewal of licence stating this negative NFE as one among the several reasons. Other reasons were delay in submitting documents such as renewed lease deed, audit report, Extract of minutes authorising one of the Director to sign the Application for renewal. Audit report for the first financial year was later on produced and other documents were also submitted to him. But due to the delay in submitting documents and because of this negative NFE, the Director passed his order rejecting the Application for renewal. Now an appeal was filed with the DGFT regarding the matter. However the company during its normal course of business is manufacturing products for export and for sales within the country. The materials imported duty free was kept in Bonded area and which needs to be released for supplying to Govt Department free of Cost. Can any one help me in this subject.
28 February 2011
The EOU want to raise invoice but customs authorities says that EOU cannot remit duty and file ER2 returns since their registration number is valid and wait for the decision of DGFT regarding renewal of licence. Or to exit from the scheme and pay duty forgone. However the management wish to wait for the decision of DGFT. So till that decision, products needs to be invoiced. Is it possible ?
CAclubindia
