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Registration of EOU

CA Manish Solanki (Chartered Accountant) (26 Points)

04 March 2009

Dear Members,

We want to form a 100% Export Oriented Unit for the Data Outsourcing.

If you have any kind of information on the formation & registration of the EOU, please let me know.

Thanks

Manish Solanki

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3 Replies

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 05 March 2009

If you need to establish an 100% EOU unit, approach jurisdictional development commissioner, apply, sign a LoA, approach Central Excise for registration and start your work. If you need an STPI unit (data processing work), approach STPI authority. This scheme is executed by Ministry of IT whereas EoU scheme is of Ministry of Commerce. They both have same tax benefits and almost same procedure.

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RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 11 April 2011

THANKYOU RAJESH JI FOR ENLIGHTEN ON STPI REGISTRATION ,

SOLANKI JI,

An EOU /STPI/BTPcan be set up by any entrepreneur for manufacturing of goods and also for rendering services. An EOU can be set up for repair, reconditioning, re-making and re-engineering also.

Trading activity is not allowed in the EOU Scheme.

EOU unit is required to achieve only positive Net Foreign Exchange (NFE) over a period of 5 years.

Policy for EOU is given in Chapter-6 Foreign Trade Policy and Chapter 6 of Handbook of Procedure (Vol. – I)

EOU can also be set up in the following sectors: -

Agriculture
Animal Husbandry
Aquaculture
Floriculture
Horticulture
Pisciculture
Viticulture
Poultry or
Sericulture.

All applications are to be filed with the concerned Development Commissioner of Special Economic Zone (For jurisdiction of Development Commissioner) Appendix 14-I- K

The unit/ promoter has to apply in the application form, to be given in triplicate given in Handbook of Procedures in Appendix 14-1A (Please click here)

Project Report including a write up on the background of the promoters establishing their credentials and standing.

Please see Appendix 14-1B (Please click here) for documents required by the Development Commissioner for approval.

For sector specific conditions Please see Appendix 14-1C (Please click here)

DD for Rs. 5,000/- drawn in favour of “The Pay & Accounts Officer, Ministry of Commerce and Industry, Department of Commerce, payable at the Central Bank of India, Udyog Bhavan, New Delhi.

Registration –cum-Membership Certificate (RCMC) should be obtained from the office of the concerned Development Commissioner.

Import Export Code: If the unit does not have an Import Export code (IEC), it will apply in the prescribed form (Appendix 18-B) to the Zone Administration for the same.

IV. APPROVAL PROCEDURE

Letter of Permission (LOP)

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 interview of the promoter by the Approval Committee. For format of LOP please see Appendix 14-IE (Please click here)

Legal undertaking (LUT)

A legal undertaking in the prescribed form undertaking to abide by the terms and conditions of the LOP has to be executed by the unit in format given at Appendix 14-1F (Please click here ).

A Green Card will be issued to the unit by the Zone Administration on request.

Approval from State Government Agencies:

V. AFTER APPROVAL

After the approval from the Development Commissioner concerned, the manufacturing and other activities have to be undertaken under customs bond for which formal application is to be made to the jurisdictional Assistant Commissioner/ Deputy Commissioner of the Customs/ Central Excise for issuance of a Private Custom Bonded Warehouse Licence under section 58 and 65 of the Customs Act, 1962. The application shall be accompanied by the following documents/information: -

Copy of notification whereunder the place (proposed location of unit) has been declared as warehousing station under section 9 of the Customs Act. In case the approved place is not a notified warehousing station, a separate application for issuance of such notification is to be submitted to the Commissioner of Customs through the jurisdictional Assistant Commissioner/ Deputy Commissioner.

Copy of LOI/LOP issued by Development Commissioner concerned and LUT accepted by the Development Commissioner.

Details of the premises including ground plan, purchase/rent/lease deed, allotment letter from Industrial Development Corporation/ Authority (if any)

Details about the constitution of the firm/company including its Proprietor/Partners/Directors etc.

Project Report indicating stage wise manufacturing process.

List of raw material, consumables and capital goods etc. required.

Undertaking that cost recovery and other charges shall be paid.

After verification of the premises and relevant documents, the requisite licence under section 58 and 65 of the Customs Act will be issued by the Assistant Commissioner/ Deputy Commissioner Customs/ Central Excise on priority basis.

B-17 Bond:

B-17 bond is a multi – purpose surety bond which the unit has to execute with the Jurisdictional Assistant/ Deputy Commissioner Customs/ Central Excise on a non-judicial stamp paper of Rs. 300/-. Format of the Bond is prescribed under Notification No. 6/98 CE (N.T) dt. 2-3-98.

B-17 Bond is a surety bond and in case valid surety cannot be arranged security @ 5% of the bond amount has to be furnished. The bond amount shall be equal to 25% of the duty foregone on the capital goods required in the next 5 years plus duty foregone on the value of raw material for a period of 3 months.

B-17- Bond covers the following activities:-

Duty free import/ procurement of goods as per relevant notification and warehousing/storage in the unit and their utilization.

Transhipment of import/ export of goods duty free between port of import/ export and units premises.

Movement of duty free goods for job work and return.

Temporary clearance for repair and display in exhibitions, testing/ approval etc.

However it dose not cover differential duty amount against advance DTA sale for which a separate bond is to be executed.

The unit has also to take a Central Excise Manufacture Code No. from the Superintendent, Central Excise to enable them to sell in the domestic market.

The Development Commissioner is empowered to grant approvals on the following matters: -

Import of additional capital goods
Enhancement of production capacity
Broad-banding/diversification
Change in name/ constitutions
Change of location/expansion
Extension of validity of LOP/LOI/LOA:
Import of Office equipment:
Merger of two or more EOU/SEZ Units
Import of spares and accessories of DG sets
Eligibility certificates for grant of employment visa to low level foreign technicians to be engaged by EOUs as per Ministry of Home Affairs Letter No. 250227/7/99-F-1 dated 20-9-1999 (Annexure-XI).
Sale of goods in DTA.
De-bonding/ Exit from EOU scheme.

Approval from State Government Agencies:

The unit has to secure approval for its wiring and electrical plan from the Electrical authorities.

It has also to secure power allocation and wiring approval from the State Electricity Board.

The industrial water supply is undertaken by the

The unit has to take a registration under the State Government Sales Tax Act and Central Sales Tax Act.

In case the unit already has a registration with the State Sale Tax Department the address of the additional premises should also be endorsed in the registration certificate.

The unit has also to take Small Scale Industry (SSI) Registration from the District Industries Center to apply for State Government’s Investment Subsidy.

In case there are effluents or emissions the unit has to secure approval form the Pollution Control Board.

Every Zone has a statutory Single Window Clearance Board.

REGARDS,