The Export Oriented Unit (EOU) Scheme, which had been introduced in the early 1980s remains in the forefront of country’s export production schemes. The scheme has witnessed many changes over the last twenty-four years in the context of ever changing economic realities. However, the basic premise remains the same. This premise is that the exporters are treated as a special class and given the required tariff, non-tariff and policy support to facilitate their export efforts. Thus, today the EOU Scheme has emerged as a dynamic policy initiative facilitating the exporting community in the task of increased exports. The EXIM Policy, 2002-07 reinforces the importance of Scheme in chapter 6 of the policy. Appendix 14 I of the Handbook of procedures (Vol.1) as amended upto 28- 1-2004 sets out the procedures and benefits of this scheme.
100% EOUs fall into 3 categories
(a) EOUs established anywhere in India and exporting 100% products except certain fixed percentage of sales in the Domestic Tariff Area (DTA) as may be permissible under the Policy.
(b) Units in Free Trade Zones in Special Economic Zones (SEZs) and exporting 100% of their products.
(c) EOUs set up in Software Technology Parks (STPs)
and Electronic Hardware Technology Parks (EHTPs) of India for development
of Software & Electronic Hardware.
For this purpose, the unit has to execute a Bond known as B-17 Bond which, inter adia, covers an undertaking by the unit to pay on demand an amount equal to the duty leviable on the goods imported duty free that are not proved to the satisfaction of the Asstt. Commissioner of Custom to have been used in the manufacture of articles for export. The value of Bond should be 25% of the amount of duty leviable on capital goods intended to be procured and on raw material to the held in stores for 6 months. The Bond is to the supported either by a surety for 100% of the value of Bond or by a Bank Guarantee for 5% of the value of Bond. The Bank Guarantee should be a continuing one.
The unit has to furnish following documents for applying
to Deputy / Assistant Commissioner to grant a license of Customs Bonded
warehouse and permission for manufacturing in Bonded warehouse u/s 58
& 65 of Customs Act, 1962.
1. Application for grant of licence u/s 58 & 65 of Customs
The specimen form for B-17 Bond and Bank Guarantee to be
submitted by unit & its Banker are given as annexures ‘A’
1. Application for renewal in the prescribed Performa.
For the import of duty free capital goods or raw materials, unit has to make an application to Customs alongwith copy of invoice duly attested, packing list, Import certificate from STPI in case of STP, HTPI units, IGMS & Airway Bill or Bill of lading. The department will issue a serial numbered Procurement Certificate for duty free imported goods.
For procurement of duty free indigenous goods, purchase order & import certificate from STPI (in case of STP, HTPL units) is to be produced. The department will issue a CT-3 form to enable duty free procurement of indigenous goods.
The copies of above circular may be visited on following websites
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