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Net Foreign Exchange for 100% EOU

21 September 2007

Hello,

100% Eou is selling to a unit in SEZ and receiving payment in INR. Is it eligible for Net Foreign Exchange (NFE) earning calculation or EOU it should receive payments in Foreign currency through EEFC account. Anybody can clarify as per Foreign Trade policy. In the other case Eou is selling to a DTA unit and receives payment in Foreign Currency through EEFC Account, is it eligible for NFE calculation. Please clarify as per Foreign Trade Policy.

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3 Replies

Dinessh Kumar (Articled Asst.,) (193 Points)
Replied 22 September 2007

Hi Aravinda Kumar, IF the EOU is selling the goods to SEZ, again the goods should be exported by the SEZ. Then only it will be taken as Export, in turn it can be considered for NFE calculation

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hamid (Manager Finance/Commerce) (74 Points)
Replied 30 December 2007

Please see Para 6.9 in foreign Trade Policy 2004-2009. Other Supplies in DTA 6.9 Following supplies effected from EOU/EHTP/STP/BTP units to DTA will be counted for the purpose of fulfillment of positive NFE: (a) Supplies effected in DTA to holders of advance licence, advance licence for annual requirement/DFRC /EPCG scheme. (b) Supplies effected in DTA against payment from the Exchange Earners Foreign Currency (EEFC) Account of the buyer in the DTA or against foreign Exchange remittance received from overseas. ( c) Supplies to other EOU/EHTP/STP//BTP/SEZ units provided that such goods are permissible for procurement in terms of paragraph 6.2 of the Policy. (d) Supplies made to bonded warehouses set up under the policy and/ or under section 65 of the customs act and free trade and warehousing zones, where payment is received in foreign exchange. (e) Supplies of goods and services to such organizations which are entitled for duty free import of such items in terms of general exemption notification issued by the Ministry of Finance . (f) Supply of services (by services units) relating to exports paid for in free foreign exchange or for such services rendered in India Rupees which are otherwise considered as having been paid for in free foreign exchange by RBI. (g) Supplies of Information Technology Agreement (ITA -1) items and notified zero duty telecom/ electronic items.