12 December 2012
Some incentives given to EOUs *****************************
No import licences are required by the EOU units and import of all industrial inputs exempt from customs duty. Supplies from the DTA to EOUs are regarded as deemed exports and are hence exempt from payment of excise duty which means that high quality inputs are available at lower costs. On fulfillment of certain conditions, EOUs are exempted from payment of corporate income tax for a block of 5 years in the first 8 years of operation. Export earnings continue to be exempt from tax even after the tax holiday is over. Industrial plots and standard design factories are available to EOUs at concessional rates. Single window clearance for EOU. For example, the State Government of Kerala as well of Karnataka has constituted single window clearance mechanisms such as District Single Window Clearance Board (in Kerala) and Karnataka Udyog Mitra (in Karnataka) for the purpose of speedy issue of various licences, clearances. Private bonded warehouses in the 7 EPZs can be set up for Import and sale of goods including in the DTA, subject to payment of applicable duties at the time of sale. Trading including re-export after repacking/labeling. Re-export after repair, reconditioning or re-engineering EOUs and EPZs are permitted to sub-contract part of their production processes for job work to units in the DTA on a case by case basis. Supplies to the DTA under international competitive bidding against payment in foreign exchange to other EOUs and EPZ units and against import licenses are considered towards fulfilment at the export obligation. The FOB value of exports of EOUs and EPZ units can be clubbed with that of parent companies located in the DTA for the purpose of obtaining a Trading or Export House status. EOUs and EPZ units may export goods through Trading and Export Houses or other EOU and EPZ Units.
Attractive Policy Provisions for EOUs :
EOU can also import second hand capital goods without any age limit. 50% of physical exports can be sold in domestic market on payment of concessional duty. EOUs can process and export rice (Basmati & Non-Basmati). EOUs including Gem & Jewellery units are permitted to sub-contract upto 50% of their production (or) production process in DTA / other EOUs. EOUs are allowed to utilize plant and machinery for job work DTA units provided the goods are exported directly from the EOU premises. EOUs in Agriculture and allied sectors and in granite sector may transfer the capital goods and the inputs to the Farms/field/quarries for usage relating to the production in the EOU. In case of new EOUs, Advance DTA sale will be allowed not exceeding 50% of its estimated exports for the first year except the pharmaceutical units where this will be based on its estimated exports for the first two years. Simultaneous Advance DTA sale permission is given on quarterly basis for perishable goods like mushrooms, cut flowers etc. Exports through third party is permitted Exports from the job workers premises is allowed 100% FDI investment permitted through Automatic Route similar to SEZ units EOUs can obtain Foreign currency loans from OBUs situated in the SEZs EOUs have to achieve only positive Net Foreign Exchange (NFE) within 5 years i.e., A - B > 0 where (A) is the FOB value of Exports and (B) is CIF value of imports
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