Chapter - 6 Export Oriented Units(EOUs) Electronics Hardware Technology Parks (EHTPs)and Software Technology Parks(STPs).

Goods permitted to be imported / procured from DTA shall include:

1. Raw materials, components, consumables, intermediates, spares and packing materials;
2. Capital goods, whether new or second-hand, including inter-alia following and their spares:
   1. DG sets, captive power plants, transformers and accessories for all above.
   2. Pollution control equipment.
   3. Quality assurance equipment.
   4. Material handling equipment, like fork lifts and overhead cranes, mobile cranes, crawler cranes, hoists and stackers.
   5. Un-interrupted Power Supply System (UPS), Special racks for storage, storage systems, modular furniture, computer furniture, anti-static carpet, teleconference equipment, Servo Control System, Air-conditioners / Airconditioning system, panel for electricals and special data transmission cable.
   6. Security Systems.
   7. Tools, jigs, fixtures, gauges, moulds, dyes, instruments and accessories.
3. Raw material for making capital goods for use within unit.
4. Others including:
   1. Prototypes and technical samples for existing product(s) and product diversification development or evaluation.
   2. Drawings, blue prints, charts, microfilms and technical data.
   3. Office equipment, including PABX, Fax machines, projection system, Computers, Laptop, Server.
5. Spares and consumables for above items.
6. Any other items not mentioned above with approval of BOA.

Import of goods by EOU / EHTP / STP / BTP units shall be subject to following conditions:

1. Goods shall be imported into EOU / EHTP / STP / BTP premises. However, agriculture and allied sectors and granite sector units in EOU may supply / transfer capital goods and inputs in farm / fields / quarries with prior intimation to jurisdictional Customs / Central Excise authorities, provided ownership of goods rests with EOU units. Granite sector would also be allowed to take spares upto 5% of value of Capital Goods to quarry site.
   
2. Procedure as prescribed under Customs / Excise rules for EOUs and units in EHTP / STP / BTP will be followed and appropriate bond executed with Customs / Excise authorities.
   
3. Goods, except capital goods and spares, shall be utilised by EOU / EHTP / STP / BTP units within a period of three years or as may be extended by Customs authorities. However, imported tea shall be utilized within a period of 6 months from date of import.  [Old- Similarly, export obligation against import of items [covered by chapter 9 of ITC (HS)] shall be fulfilled within a period of 90 days from date on which first import consignment is cleared by Customs authorities.] This amendment by DGFT PUBLIC NOTICE NO.: 06 (RE-2007)/2004-2009.
   
   However in case of import of spices for VA purpose like crushing / grounding / sterlisation or for manufacture of oils and oleoresins and not for simple cleaning, grading, re-packing etc., EO shall be fulfilled within 120 days.
4. Goods already imported / shipped / arrived before issue of LoP / LoI are also eligible for duty free clearance under EOU / EHTP / STP / BTP scheme provided customs duty has not been paid and goods have not been cleared from Customs.

An EOU / EHTP / STP / BTP unit may export goods manufactured/ software developed by it through other exporter or any other EOU / EHTP / STP / SEZ / BTP unit subject to condition that:

1. Goods shall be produced in EOU / EHTP / STP / BTP unit concerned.
2. Level of NFE or any other conditions relating to imports and exports as prescribed shall continue to be discharged by EOU / EHTP / STP unit concerned.
3. Export orders so procured shall be executed within parameters of EOU / EHTP / STP / BTP schemes and goods shall be directly transferred from unit to port of shipment.
4. Fulfillment of NFE by EOU / EHTP / STP / BTP units in regard to such exports shall be reckoned on basis of price at which goods are supplied by EOUs to other Exporter or other EOU / EHTP / STP / BTP / SEZ unit.
5. All export entitlements, including recognition as Status Holder would accrue to exporter in whose name foreign exchange earnings are realized. However, such export shall be counted towards fulfillment of obligation under EOU / EHTP / STP / BTP scheme only.

Sub-contracting by EOU gems and jewellery units through other EOUs or SEZ Units or units in DTA shall be subject to following conditions:-

1. Goods, finished or semi finished, including studded jewellery, taken out for sub- contracting shall be brought back to unit within 90 days.
2. No cut and polished diamonds, precious and semiprecious stones (except precious, semi-precious and synthetic stones having zero duty) shall be allowed to be taken out for sub-contracting.
3. Receive plain gold / silver / platinum jewellery from DTA/ EOU / SEZ units in exchange of equivalent quantity of gold / silver / platinum, as case may be, contained in said jewellery.
4. EOUs shall be eligible for wastage as applicable as per para 4A.2 of HBP v1 for sub-contracting and against exchange.
5. DTA unit undertaking job work or supplying jewellery against exchange of gold / silver / platinum shall not be entitled to deemed export benefits.

EOUs engaged in production / processing of agriculture / horticulture / aquaculture products, may, on basis of annual permission from Customs authorities, take out inputs and equipments (specified at Appendix 14-I-J) to DTA farm subject to following conditions:-

1. Supply of inputs by EOUs to contract farm(s) shall be subject to input-output norms approved by DGFT / BoA.
2. There shall be contract farming agreement between EOU and DTA farmer(s).
3. Unit has been in existence for at least two years and engaged in export of agriculture / horticulture / aquaculture products; otherwise it shall furnish bank guarantee equivalent to duty foregone on capital goods / inputs proposed to be taken out to Deputy / Assistant Commissioner of Customs / Central Excise till unit completes two years

EOU / EHTP / STP / BTP units may export goods for holding / participating in exhibitions abroad with permission of DC subject to following conditions:-

1. Unit shall produce to Customs authorities letter in original or its certified copy containing approval of DC . For gems and jewellery items, a self certified photograph of products shall also be submitted.
2. In case of re-import, such items, on arrival shall be verified along with export documents before clearance.
3. Items not sold abroad shall be re-imported within 60 days of close of exhibition. However, in case exporter is participating in more than one exhibition within 45 days of close of first exhibition, then 60 days shall be counted from date of close of last exhibition.
4. In case of personal carriage of goods and for holding / participating in overseas exhibitions, value of such gems and jewellery shall not exceed US $ 2 million.

Personal carriage of gold / silver / platinum jewellery, cut and polished diamonds, precious, semi-precious stones, beads and articles as samples upto US $ 100,000 for export promotion tours and temporary display / sale abroad by EOUs is also permitted with approval of DC subject to following conditions:-

1. EOU shall bring back goods or repatriate sale proceeds within 45 days from date of departure through normal banking channel.
2. Unit shall declare personal carriage of such samples to Customs while leaving country and obtain necessary endorsement.

For Personal carriage of jewellery by foreign bound passenger, following documents shall be submitted by EOU units as proof of exports:

1. Copy of shipping bill filed by EOUs;
2. A copy of Currency Declaration Form filed by Foreign buyer with Customs at time of his arrival; and
3. Foreign Exchange Realisation / Encashment Certificate from Bank.

In addition to this, Personal Carriage by foreign bound passenger on Document Against Acceptance (DA) / Cash On Delivery (COD) basis is also allowed. EOUs will have to furnish following documents as proof of exports:-

1. Copy of Shipping Bill;
2. Bank Certificate of Export and Realisation.

Personal carriage of parts by foreign bound passengers shall be allowed in case same are required for repairs of exported goods at customer site. Following documents should be submitted as proof of exports:-

1. Permission letter from Customs for exports.
2. Invoice with value (for payment or free of charge)

EOU / EHTP / STP / BTP units may, on basis of records maintained by them and prior intimation to Customs authorities:-

1. Transfer goods to DTA / abroad for repair / replacement, testing or calibration and return.
2. Transfer goods for quality testing / R&D purpose to any recognised laboratory / institution upto Rs.5 lakhs per annum without payment of duty, on giving suitable undertaking to Customs for return of goods. However, if goods have been consumed / destroyed in process of testing etc. a certificate from laboratory / institution to this effect be furnished to Customs.

Powers and functions of Unit Approval Committee of EOUs shall be as under:-

1. To consider applications for setting up EOUs other than proposals for setting up of unit in services sector (except R&D, software and IT enabled services, or any other service activity as may be delegated by BoA). Items of manufacture requiring industrial licence under ndustrial (Development & Regulation) Act, 1951 shall be considered by BoA.
2. to consider and permit conversion of units in SEZ to EOU;
3. to monitor performance of Units;
4. to supervise and monitor permission, clearances, licences granted to units and take appropriate action in accordance with law;
5. to call for information required to monitor performance of unit under permission, clearances, licenses granted to it;
6. to perform any other function delegated by Central Government or its agencies;
7. to perform any other function as may be delegated by State Governments or its agencies; and
8. to grant all approvals and clearances for establishment and operation of EOUs.

DC / Designated Officer shall have following powers in respect to units. Jurisdiction of DC is given in Appendix 14-I-K.

1. Conversion of sick / closed DTA unit into EOU;
2. Conversion of EOU to STP / EHTP / BTP and vice-versa as per prescribed procedure;
3. To allow increase in value of capital goods in terms of Indian Rupees, on account of foreign exchange rate fluctuations;
4. To permit capacity enhancement without any limit in case of de-licensed industries only;
5. Permit broad-banding for similar goods and activities mentioned in LoP or to provide for backward or forward linkages to existing line of manufacture;
6. Authorize change in name of company or implementing agency and change from a company to another provided new implementing agency / company undertakes to take over assets and liabilities of existing unit;
7. Permit change of location from place mentioned in LoP to another and/or include additional location provided that no change in other terms and conditions of approval is envisaged and that new location is within territorial jurisdiction of DC / Designated Officer;
8. Extend validity period of LoP by three years beyond initial validity period of LoP (except in case where there is a restriction on initial period of approval, like setting up of oil refinery projects);
9. Cancel LoP wherever warranted;
10. Permit merger of two or more units into one unit provided units fall within jurisdiction of same DC / Designated Officer subject to conditions that activities are covered under provision of broad banding;
11. Exercise powers of adjudication under Section 13 read with Section 11 of FT (D&R) Act, in respect of EOUs as mentioned in Gazette Notification No. SO. 194(E) dated 6.3.2000;
12. Do valuation of exports declared on SOFTEX form by EOUs as per RBI A.D. (M.A Series) Circular AP (DIR
    series Circular No.9 dated 25.10.2001);
13. Issue 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. 25022 / 7 / 99- F.1 dated 20.9.1999;
14. Registration-cum-Membership Certificate
    Function as a Registering authority for EOU / EHTP / STP/ BTP. A separate Registration cum- Membership Certificate shall not be required in their cases as provided for in paragraph 2.44 of FTP except in case of spices. In case of spices, it would be mandatory for units to get themselves registered with Spices Board also.
15. Importer Exporter Code No.
    Allot Importer-Exporter Code number for EOUs, if same has already not been allotted to entity;
16. Green Card
    Issue of Green Card automatically after execution of LUT;
17. Grant / renewal of Status Certificate in respect of EOUs provided it does not involve clubbing of FOB value of exports of its parent company in DTA;
18. Publicity of EOU / EHTP / STP / BTP Scheme under their jurisdiction.