CHAPTER 6

Export Oriented Units

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

6.00 Scheme
Policy relating to EOUs, EHTPs, STPs and BTPs Schemes is given in Chapter 6 of
Foreign Trade Policy (FTP).

6.01 Application / Approval / Renewal of approval

(a) For setting up an EOU, three copies of application as in ANF 6A of
Appendices & ANFs may be submitted to DC.
(b) (i) Applications for setting up units under EOU scheme shall be
approved or rejected by Units Approval Committee within 15
days, as per criteria indicated in Appendix 6A of Appendices &
ANFs and sector specific conditions relating to approval as in
Appendix 6B of Appendices & ANFs. In other cases, approval
may be granted by DC after clearance by BOA.
(ii) STP / EHTP complexes can be set up by Central Government,
State Government, Public or Private Sector Undertakings or any
combination thereof, duly approved by Inter-Ministerial
Standing Committee (IMSC) in Ministry of Electronics &
Information Technology-MeitY. Application for setting up EHTP
/ STP unit shall be in format prescribed by MeitY and shall be
submitted to officer designated by MeitY.
(iii) A BTP can be set up by Central Government, State Government,
Public or Private Sector Undertakings or any combination
thereof. Application for setting up of BTP shall be submitted to
Department of Bio-Technology (DoBT) and such applications
which meet guidelines prescribed by DoBT will be approved
and recommended to DGFT for notification. Application for
setting up of BTP unit shall be submitted to officer designated
by DoBT.
(c) On approval, a Letter of Permission (LoP) / Letter of Intent
(LoI) shall be issued by DC / designated officer to EOU/ EHTP /

pg. 134
 STP / BTP unit. LoP / LoI shall have an initial validity of 2
years to enable the Unit to construct the plant & install the
machinery and by this time the unit should have commenced
production. In case the unit is not able to commence production
in the initial validity period of 2 years, an extension of one year
may be given by the DC for valid reasons to be recorded in
writing. Subsequent extension of one year may be given by the
Unit Approval Committee subject to condition that two thirds
of activities including construction, relating to the setting up of
the Unit are completed and a Chartered Engineer’s certificate to
this effect is submitted by the Unit. Further extension, if
necessary, will be granted by the Board of Approval. Once unit
commences production, LoP / LoI issuedshall be valid for a
period of 5 years for its activities. This period may be extended
further by DC for a period of upto 5 years at a time. However, in
case of extension of LoP required for completing exit formalities,
the LoP may be extended for a limited period i.e. less than 5 years
by the DC.
(d) Proposals for setting up an EOU requiring industrial licence
may be granted approval by the concerned DC after clearance of
proposal by BOA (as per Appendix 6C of Appendices & ANFs)
and Department for Promotion of Industry and Internal Trade
(DPIIT) within 45 days.
(e) LoP / LoI shall specify item(s) of manufacture / service activity,
annual capacity, projected annual export for first five years in
dollar terms, Net Foreign Exchange (NFE) earnings, limitations,
if any, regarding sale of finished goods, by-products and rejects
in DTA and such other matter as may be necessary and also
impose such conditions as may be required.
(f) LoP / LoI issued to EOU / EHTP / STP / BTP units by concerned
authority would be construed as an authorisation for all
purposes. Standard format for LoP for EOU is given in Appendix
6D of Appendices & ANFs.
(g) EOUs shall have separate earmarked premises for separate LoP.
Similarly, EOUs may be approved on leased premises provided
lease has been obtained from Government Department /
Undertaking / Agency. However, in case lease is obtained from
private parties, it shall have a validity period of five years from
date of LUT and DC shall satisfy himself of genuine nature of
lease.
(h) On completion of validity of LOP/LOI as provided for in
Paragraph 6.05 of FTP, it shall be open to unit to continue under
pg. 135
 scheme or opt out of scheme. Where unit opts to continue,
DC/Designated Officer will extend validity of the LOP/LOI. If no
intimation in this regard is received from unit within a period of
six months of expiry of the validity, DC/Designated Officer will,
suomoto, take action to cancel approval under the scheme and
take further action in this regard. Where units give their option
to continue after expiry of six months as stipulated above,
DC/Designated Officer will grant extension after obtaining
approval of BOA/IMSC.

6.02 Legal Undertaking (LUT)

(a) Approved EOU / EHTP / STP / BTP unit shall execute an LUT with
DC / Designated Officer concerned as in Appendix 6E of
Appendices & ANFs.
(b) All EOU / EHTP / STP / BTP units should have permanent e-mail
address. No LUT for new units shall be executed unless unit has
its permanent e-mail address and digital signature on said e-mail
ID. In event of an EOU not having permanent e-mail address and
digital signature, further imports and DTA sale shall not be
permitted by DC.

6.03 Export of Goods and Services

(a) Software units may undertake exports using data communication
links or in form of physical exports (which may be through
courier service also), including export of professional services.
(b) EOUs shall be permitted to export jewellery on basis of a notional
rate certificate issued by nominated agency. This rate will be
based on prevailing Gold / US$ rate and US$ / INR rate in notional
rate certificate. Certificate issued by nominated agency should not
be older than 7 working days of date of shipment.
(c) Exporter shall have flexibility to fix price and repay gold loan
within 180 days from date of export. Price shall be communicated
to nominated agencies who will issue a certificate showing final
confirmation of rate to bank negotiating document, to ensure
export proceeds are realized at this rate.
(d) Gems & Jewellery EOUs may re-export imported goods and export
domestically procured goods, including goods generated out of
partial processing/ manufacture. Besides, supply of unsuitable /
broken cut and polished diamonds, precious and semi-precious
stones upto 5% of value of imported or indigenously procured
pg. 136
 goods to DTA against valid Gems & Jewellery REP as applicable on
payment of appropriate duty is also permitted.

6.04 Import / Domestic Procurement of Goods

Goods permitted to be imported / procured from DTA shall include:
(a) Raw materials, components, consumables, intermediates, spares
and packing materials.
(b) Capital goods and its spares, whether new or second-hand which
inter-alia includes the following:
(i) Captive power plants (DG Sets, Wind Power, Solar Power),
including transformers and accessories. This would be
subject to the condition that no tax/duty benefits stipulated
under EOU Scheme shall be available for setting up as well
as operations and maintenance of such wind and solar
power plants.
(ii) Pollution control equipment.
(iii) Quality assurance equipment.
(iv) Material handling equipment, like fork lifts and overhead
cranes, mobile cranes, crawler cranes, hoists and stackers.
(v) 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 / Air conditioning
system, panel for electricals and special data transmission
cable.
(vi) Security Systems
(vii) Tools, jigs, fixtures, gauges, moulds, dyes, instruments and
accessories.
(c) Raw materials for making capital goods for use within unit.
(d) Others including:
(i) Prototypes and technical samples for existing product(s)
and product diversification development or evaluation.
(ii) Drawings, blue prints, charts, microfilms and technical data.
(iii) Office equipment, including PABX, Fax machines, projection
system, Computers, Laptop and Server.

pg. 137
 (e) Spares and consumables for above items.
(f) Any other items not mentioned above with approval of BOA.

6.05 Repair / Remaking of Jewellery

EOUs may import plain / studded gold / platinum or silver jewellery for export
after repairs / remaking.

6.06 Conditions of Import

Import of goods by EOU / EHTP / STP / BTP units shall be subject to following
conditions:
(a) 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
authorities, provided ownership of goods rests with EOUs. Granite
sector would also be allowed to take spares upto 5% of value of
Capital Goods to quarry site.
(b) Procedure as prescribed under Customs/Central Excise rules for
EOUs and units in EHTP / STP / BTP will be followed and
appropriate bond executed with Customs/Central Excise
Authorities.
(c) (i) The period of utilisation of goods, including capital
goods, shall be co-terminus with the validity of LoP.
(ii) However, imported tea shall be utilized within a period of 6
months from date of import. Similarly, export obligation
against import of items {covered by Chapter 9 of ITC(HS)}
and coconut oil shall be fulfilled within a period of 90 days
from the date on which first import consignment is cleared by
Customs Authorities.
(iii) Further, in case of import of spices for VA purpose like
crushing / grinding / sterilization or for manufacture of oils
and oleoresins of pepper, cardamom and chillies (and not
for simple cleaning, grading, re- packing etc.), EO shall be
fulfilled within 120 days from the date of importation of
first consignment. In case of import of spices (other than
pepper, cardamom and chillies) for manufacture of spice
oils and oleoresins, EO shall be fulfilled within 12 months.
(d) Goods already imported / shipped / arrived before issue of LoP /
LoI are also eligible for clearance as provided under para 6.01 (d)
pg. 138
 (ii) of FTP under EOU / EHTP / STP / BTP scheme without
payment of duty and/or taxes as applicable, provided, the said
duties and/or taxes has not been paid and goods have not been
cleared from Customs.
(e) Consumption of inputs by the EOU / EHTP / STP / BTP unit shall
be based on the Standard Input Output Norms (SION) provided
that:
(i) where no SION have been notified, generation of waste,
scrap and remnants upto 2% of input quantity shall be
allowed;
(ii) where additional items other than those given in SION are
required as inputs or where generation of waste, scrap and
remnants is beyond 2% of input quantity, use of such
inputs shall be allowed by the jurisdictional DC within a
period of three months from the date of application and
based on self declared norms, with the unit undertaking to
adjust self- declared / ad hoc norms in accordance with
norms as finally fixed by Norms Committee in DGFT;
(iii) in case of any difficulty in fixation of SION as above, BOA in
consultation with Norms Committee in DGFT, will decide
on a case to case basis.

6.07 Taking out of Fax Machines / Laptop / Computers outside

approved premises
(a) EOU / EHTP / STP / BTP units may install one fax machine at a
place of its choice, outside premises of unit, subject to intimation
of its location to concerned Customs authorities.
(b) EOU / EHTP / STP / BTP units may, temporarily take out of
premises of unit, duty and/or tax free laptop / computers and
video projection systems for working upon by authorized
employees.
(c) EOU / EHTP / STP / BTP units may install personal computers not
exceeding two in number, imported / procured duty and/or tax
free in their registered / administrative office subject to DoR
guidelines.
(d) For IT and IT enabled services, persons authorized by software
units may access facility installed in EOU / EHTP / STP / BTP unit
through communication links.

pg. 139
6.08 Facility of working from a place outside the unit
Person(s) / employee(s) authorized by a unit of (i) IT related EOU or (ii) STP or
(iii) EHTP or (iv) BTP may work from a place outside the said unit, subject to
the following conditions:
(i) There must be an Authorisation from the unit specifying the
duration of suchauthorisation.

(ii) The Unit shall be responsible for carrying out the work and
supervision and shall be liable for any misuse.

(iii) Export of the resultant products / services would take place

only from the premises of the unit.

6.09 Leasing of Capital Goods

Value of imported capital goods financed through leasing companies or

obtained free of cost and / or on loan / lease basis, shall also be taken into
account for purpose of calculation of NFE as defined in FTP.

6.10 Net Foreign Exchange (NFE) Earnings

(a) EOU / EHTP / STP / BTP unit shall be a positive net foreign
exchange earner. NFE earnings shall be calculated cumulatively in
the block period as per Paragraph 6.04 of FTP, according to the
formula given below. Items of manufacture for export specified in
LoP / LoI alone shall be taken into account for calculation of NFE.

Positive NFE = A-B>0

Where,
“NFE” is Net Foreign Exchange;

“A” is FOB value of exports by EOU / EHTP / STP / BTP unit

and other supplies under para 6.08 of FTP;

“B” is sum total of CIF value of all imported inputs and CIF
value of all imported capital goods, and value of all payments
made in foreign exchange by way of commission, royalty, fees,
dividends, interest on external borrowings / high sea sales
during first five year period or any other charges. It will also
include payment made in Indian Rupees on high sea sales; and

“Inputs” mean raw materials, intermediates, components,

pg. 140
 consumables, parts and packing materials.
(b) If any goods are obtained from another EOU / EHTP / STP / BTP /
SEZ unit, or procured from an international exhibition held in
India, or bonded warehouses or precious metals procured from
nominated agencies, value of such goods shall be included under
“B”.
(c) If any capital goods are imported duty and/or tax free or leased
from a leasing company, received free of cost and / or on loan
basis or transfer, CIF value of capital goods shall be included pro-
rata, under “B” for period it remains with units.
(d) For annual calculation of NFE, value of imported capital goods and
lump sum payment of foreign technical know-how fee shall be
amortized as under: 1st– 10th year : 10%. Provided that above
amortization rates would be applicable only if an undertaking is
given by a unit that it will not exit to DTA in the first 10 years. For
existing units, proportionate Customs and excise duty must be
paid where NFE is less than depreciation already claimed, before
exit.

6.11 Maintenance of Accounts

a) EOU / EHTP / STP / BTP unit shall maintain proper account, and
shall file digitally signed quarterly and annual report as
prescribed in Annexure to Appendix 6E of Appendices & ANFs to
DC / Designated Officer in MeitY / DoBT and Customs and Central
Excise authorities. In addition, STP unit shall file, every month,
report of services classified in Annexure V of Appendix 6E of
Appendices & ANFs in the ‘Service Exports Reporting Form
(SERF)’ prescribed in Annexure VI of Appendix 6E of Appendices
& ANFs to the designated officer in STP. Use of SERF would be
limited to capturing information on services exports from STPs.
b) Unit shall be able to account for entire quantity of each category of
homogenous goods imported / procured duty and/or tax free, by
way of exports, sales / supplies in DTA or transfer to other SEZ /
EOU / EHTP / STP / BTP units and balance in stock. However, at
no point of time, units shall be required to correlate every import
consignment with its exports, transfer to other SEZ / EOU / EHTP
/STP / BTP units, sales in DTA and balance in stock. Any matter
for clarification as to whether goods are homogenous or not shall
be decided by Units Approval Committee.

pg. 141
6.12 Monitoring of NFE
Performance of EOUs shall be monitored by Units Approval Committee as per
guidelines given in Appendix 6F of Appendices & ANFs. Performance of EHTP /
STP / BTP shall be monitored by MeitY / DoBT jointly with jurisdictional
Customs authority.

6.13 Conversion of Scrap / Dust / sweeping of Gold / Silver /

Platinum into Standard Bars
Scrap / dust / sweeping of gold / silver / platinum may be sent to Government
of India Mint / private mint from EOU / EHTP / STP units and returned to
them in standard bars in accordance with procedure prescribed by Customs
authorities, or may be permitted to be sold in DTA on payment of applicable
GST and compensation cess alongwith reversal of duties of Customs leviable
under First Schedule of the Customs Tariff Act, 1975 availed as exemption on
inputs, on basis of gold / silver / platinum content, as may be notified by
Customs authorities.

6.14 DTA Supplies

Notwithstanding provision of DTA sales in Paragraph 6.07 of FTP, such DTA
sales shall not affect application, to any goods, of any other prohibition or
regulation affecting import thereof in force at the time, when such goods are
imported. This also does not confer any immunity, exemption or relaxation at
any time from any commitment or compliance with any requirements to which
importer may be subject to under other laws or regulations.

6.15 Supplies to other EOU / EHTP / STP / SEZ / BTP Units

Supplies to other EOU / EHTP / STP / BTP / SEZ units shall be counted
towards NFE provided that such goods are permissible for procurement by
these units.

6.16 Transfer of Power from one Unit to another

Transfer of power from Captive Power plants from one unit of EOU / EHTP /
STP / BTP unit to another is permitted as prescribed in sector specific
condition in Appendix 6B of Appendices & ANFs.

6.17 Supply of Precious / Semi-precious / Synthetic Stones from DTA

Supplier of precious and semi-precious stones, synthetic stones and processed

pg. 142
pearls from DTA to EOUs shall be eligible for grant of Replenishment
Authorisation at rates and for items mentioned in HBP. Procedure for
submission of application for grant of Replenishment Authorisation as
contained in relevant Chapter of HBP Vol. I shall be applicable. However,
application shall be made to DC concerned. Such supplies to EOUs are not
eligible for any of deemed export benefits under Chapter 7 of the FTP.

6.18 Application for grant of entitlements

Application for grant of all entitlements may be made to DC/Designated Officer
concerned.

6.19 Export through Other Exporters

An EOU / EHTP / STP / BTP unit may export goods manufactured / software
developed by it through other exporter, or any other EOU / EHTP/ STP / BTP /
SEZ unit subject to condition that:
a) Goods shall be produced in EOU / EHTP / STP / BTP unit
concerned.
b) Level of NFE or any other conditions relating to imports and
exports as prescribed shall continue to be discharged by EOU /
EHTP / STP / BTP unit concerned.
c) 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.
d) Fulfilment 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.
e) 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 fulfilment of obligation under this scheme only.

6.20 Other Entitlements

a) FOB value of export of an EOU / EHTP / STP / BTP unit can be
clubbed with FOB value of exports of its parent company in DTA or
vice versa for the purpose of according Status Holder Certificate.
b) Sectoral norms as notified by Government shall apply to FDI in
service activities.
pg. 143
 c) STP Units / EHTP Units / Software EOUs may also use all duty
and/or tax free equipment / goods for training purpose (including
commercial training), subject to condition that no duty free
equipment / goods shall be installed outside premises of the unit
for this purpose.
d) Export of iron ore shall be subject to decision of Government.
Requirements of other conditions of exports like minimum export
price / export in consumer pack etc. as per ITC (HS) shall apply in
case raw materials are sourced from DTA and exported without
further processing / manufacturing by EOU. Export of textile
items shall be covered by bilateral agreements, wherever
applicable. Wood based units shall comply with direction of
Supreme Court contained in its order dated 12.12.1996 in Writ
(civil) No 202 of 1995- T.N. Godavarman Thirrumulppad v/s
Union of India and others with WP (Civil) No 171 of 1996 in
regard to use of timber / other wood.

6.21 Sub–Contracting
a) Sub-contracting by EOU gems and jewellery units through other
EOUs, or SEZ Units, or units in DTA shall be subject to following
conditions:-
(i) Goods, finished or semi finished, including studded
jewellery, taken out for sub-contracting shall be brought
back to unit within 90 days. However, the Customs
Authorities may grant an extension of time beyond 90 days
in deserving cases.
(ii) 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.
(iii) Plain gold / silver / platinum jewellery can be received
from DTA / EOU/ SEZ units in exchange of equivalent quantity
of gold / silver / platinum, as the case may be, contained in said
jewellery.
(iv) EOUs shall be eligible for wastage as applicable as per
paragraph 4.59 of HBP for sub-contracting and against
exchange.
(v) DTA unit undertaking job work or supplying jewellery
against exchange of gold / silver / platinum shall not be
entitled to deemed export benefits under Chapter 7 of FTP.

pg. 144
 b) Facility of getting job work done from DTA unit will be available
subject to condition that goods are brought back to premises of
unit on completion of job work.
c) Export of finished goods from job worker’s premises may be
permitted, provided such premises are registered with Central
Excise/GST authorities. Where job worker is SEZ / EOU / EHTP /
STP / BTP unit, export may be effected either from job worker’s
premises or from premises of unit. Export of such products from
job worker’s premises shall not be allowed through third parties
as provided in FTP.
d) EOUs may be permitted to remove moulds, jigs, tools, fixtures,
tackles, instruments, hangers and patterns and drawings to
premises of sub-contractors, subject to condition that these shall
be brought back to premises of units on completion of job work
within a stipulated period. Raw materials may or may not be sent
along with these goods.
e) In case of sub-contracting of production process abroad, goods
may be exported from sub-contractor premises subject to
conditions that at the time of clearance of goods, the EOU / EHTP
/ BTP / STP unit shall declare
(i) the transaction value of the finished goods to be cleared
from the sub- contractor’s premises abroad;
(ii) job work charges to be paid to the sub-contractor
abroad; and
(iii) value of intermediate goods;
supported with documents like sale price contract / or invoice for
the finished goods, job work contract and the basis of arriving at
the value of intermediate goods. The EOU / EHTP / BTP / STP unit
shall also ensure full repatriation of foreign exchange declared as
the transaction value of the finished goods cleared from the sub-
contractor’s premises abroad.

6.22 Contract Farming

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 in Appendix 6I of
Appendices & ANFs) to DTA farm subject to following conditions:
a) Supply of inputs by EOUs to contract farm(s) shall be subject to
input-output norms approved by DGFT / BOA.
b) There shall be contract farming agreement between EOU and DTA
pg. 145
 farmer(s).
c) 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
and/or taxes foregone on capital goods / inputs proposed to be
taken out, to Deputy / Assistant Commissioner of Customs, till
unit completes two years.

6.23 Exports through Exhibitions / Export Promotion Tour

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

b) In case of re-import, such items, on arrival shall be verified along

with export documents before clearance.

c) 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. In
case of exhibition in USA, the time period shall be 90 days
instead of 60 days mentioned above.
d) In case of personal carriage of goods and for holding /
participating in overseas exhibitions, value of such gems and
jewellery shall not exceed US $ 5 million.

6.24 Personal Carriage of Gems and Jewellery as samples for Export

Promotion Tours
Personal carriage of gold / silver / platinum jewellery, cut and polished
diamonds, precious, semi-precious stones, beads and articles as samples upto
US $ 1 million for export promotion tours, and temporary display / sale abroad
by EOUs, is also permitted with approval of DC subject to following conditions:
a) EOU shall bring back goods or repatriate sale proceeds within 45
days from date of departure through normal banking channel.
b) Unit shall declare personal carriage of such samples to Customs
while leaving country and obtain necessary endorsement.

pg. 146
6.25 Export through Show-rooms abroad / Duty free shops
Export of goods is also permitted for display / sale in permitted shops set up
abroad or in showrooms of their distributors / agents. Items not sold abroad
within 180 days shall be re- imported within 45 days.

6.26 Sale through Showrooms / Retail outlets at International

Airports
EOUs may set up showrooms / retail outlets at International Airports for sale
of goods in accordance with procedure laid down by Customs authorities.
Items remaining unsold after a period of 60 days shall be exported or returned
to respective EOUs.

6.27 Personal Carriage of Import / Export Parcels including

through Foreign Bound Passengers
a) For Personal carriage of jewellery by foreign bound passenger,
following documents shall be submitted by EOUs as proof of
exports:
(i) Copy of shipping bill filed by EOUs;
(ii) A copy of Currency Declaration Form filed by
Foreign buyer with Customs at time of his arrival;
and
(iii) Foreign Exchange Realisation / Encashment
Certificate from Bank.
b) 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:-
(i) Copy of Shipping Bill;
(ii) Bank Certificate of Export and Realisation.
c) Procedure for personal carriage of import parcels will be same as
for import of goods by airfreight except that parcels shall be
brought to Customs by EOUs / foreign national for examination
and release. Instructions issued by Customs authorities in this
regard should be followed mutatis mutandis.
d) Personal carriage of parts by foreign bound passengers shall be
allowed in case same are required for repairs of exported goods at

pg. 147
 customer site. Following documents should be submitted as proof
of exports:
(i) Permission letter from Customs for exports.
(ii) Invoice with value (for payment or free of charge).

6.28 Replacement / Repair of Imported / Indigenous Goods

a) Units may send capital goods abroad for repair with permission of
Customs authorities. Any foreign exchange payment for this
purpose will also be allowed. However, no permission will be
required for sending capital goods for repair within country.
b) EOU / EHTP / STP / BTP units may, on basis of records
maintained by them and prior intimation to Customs authorities:
(i) Transfer goods to DTA / abroad for repair / replacement,
testing or calibration and return.
(ii) Transfer goods for quality testing / R&D purpose to any
recognised laboratory / institution upto Rs. 10 lakh per
annum without payment of duty and/or taxes as applicable
in such cases 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.

6.29 Samples
a) EOU / EHTP / STP / BTP units may on basis of records maintained
by them, and on prior intimation to Customs authority, supply or
sell samples in DTA for display / market promotion on payment of
excise duty, if applicable, and/or payment of GST and
compensation cess alongwith reversal of duties of Customs
leviable under First Schedule to the Customs Tariff Act, 1975, if
availed oninputs.
b) Remove samples without payment of duty and/or taxes on
furnishing a suitable undertaking to Customs authorities for
bringing back samples within a stipulated period.
c) An EOU may export free samples, without any limit, including
samples made in wax moulds, silver mould and rubber moulds
through all permissible mode of export including through courier
agencies / post. For statutory requirement of Stability &
Retention sample with manufacturer, an EOU / EHTP / BTP / STP
pg. 148
 unit may re-import with or without payment of duties/taxes as
provided at para 6.01(d)(ii) of FTP those samples, which were
exported by it, under intimation to Custom Authorities, and FOB
value of such samples shall not be counted for NFE purpose and
other export benefits, if any.
d) An EOU, on basis of records maintained by them and on prior
intimation to Customs authorities, may send samples to other
EOUs for display on returnable basis within a period of 30 days.

6.30 Donation of Computer and Computer Peripherals

EOU / EHTP / STP / BTP unit may be allowed by Customs authorities
concerned to donate imported / indigenously procured (bought or taken on
loan) computer and computer peripherals, including printer, plotter, scanner,
monitor, keyboard and storage units without payment of duty other than
applicable taxes under GST Law, two years after their import / procurement
and use by units, to a school run by Central Government, or Government of a
State, or a Union Territory, or a local body; an Educational Institution run on
non-commercial basis by any organization; a Registered Charitable Hospital; a
Public Library; a Public Funded Research and Development Establishment; a
Community Information Center run by Central Government or, Government of
a State or, a Union Territory or local body; an Adult Education Center run by
Central Government or, Government of a State or, a Union Territory or a local
body or, an organization of Central Government or, a Government of a State or,
a Union Territory as per Customs / Central Excise notification.

6.31 Distinct Identity

If an industrial enterprise is operating both as a domestic unit as well as an EOU
/ EHTP / STP/ BTP unit, it shall have two distinct identities with separate
accounts, including separate bank accounts. It is, however, not necessary for it to
be a separate legal entity, but it should be possible to distinguish imports and
exports or supplies effected by EOU / EHTP / STP / BTP units from those made
by other units of enterprise.

6.32 Unit Approval Committee for EOUs

a) Composition of Unit Approval Committee shall be as
under:

(i) Development Commissioner : Chairperson

(ii) Jurisdictional Commissioner of CBIC or nominee:
member
pg. 149
 (iii) Joint DGFT or nominee: Member
(iv) Joint / Deputy Development Commissioner of the
Zone: Member
(v) Any other nominee of any Department / Agency as
special invitee.
(b) Powers and functions of Unit Approval Committee of EOUs shall
be as under:
(i) To consider applications for setting up EOUs. Items
of manufacture requiring industrial licence under
Industrial (Development & Regulation) Act, 1951
shall be considered by BOA.
(ii) to consider and permit conversion of units in SEZ to
EOU;
(iii) to monitor performance of units;
(iv) to supervise and monitor permission, clearances,
licences granted to units and take appropriate action
in accordance with law;
(v) to call for information required to monitor
performance of unit under permission, clearances,
licenses granted to it;
(vi) to perform any other function delegated by Central
Government or its agencies;
(vii) to perform any other function as may be
delegated by State Governments or its agencies;
and
(viii) to grant all approvals and clearances for
establishment and operation of EOUs

6.33 Approval of EHTP / STP / BTP Units

In case of units under EHTP / STP scheme, necessary approval / permission
shall be granted by officer designated by MeitY / Director (STPI). Designated
officer shall also exercise powers of adjudication under Section 13 read with
Section 11 of FT(D&R) Act, 1992, as amended, in respect of STP / EHTP as
mentioned in Gazette Notification No. S.O. 106 (E) dated 30-1-2006. Similarly
in case of units under BTP, necessary approval / permission shall be granted
by officer designated by DoBT. However, designated officers shall adopt
criteria for automatic approval of new units as laid down in Appendix 6A of
Appendices & ANFs.
pg. 150
6.34 Powers of DC / Designated Officer
DC / Designated Officer shall have following powers in respect to units.
Jurisdiction of DC is given in Appendix 6J of Appendices & ANFs.
a) Conversion of sick / closed DTA unit into EOU;

b) Conversion of EOU to STP / EHTP / BTP and vice-versa as

per prescribed procedure;

c) To allow increase in value of capital goods in terms of Indian

Rupees, on account of foreign exchange rate fluctuations;

d) To permit capacity enhancement without any limit in case of

delicensed industries only;

e) Permit broad-banding for similar goods and activities mentioned

in LoP or to provide for backward or forward linkages to existing
line of manufacture;

f) 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;

g) Permit change of location from place mentioned in LoP to another

and / or include or exclude additional location/space provided
that no change in other terms and conditions of approval is
envisaged and that new location/space is within territorial
jurisdiction of DC /Designated Office

h) Extend validity period of LoP 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) as per Paragraph
6.05 (a) of FTP;

i) Cancel LoP wherever warranted;

j) Permit merger of two or more units into one unit provided units
fall within jurisdiction of same DC / Designated Officer subject to
condition that activities are covered under provision of broad
banding;

k) Exercise powers of adjudication under Section 13 read with

Section 11 of FT (D&R) Act, in respect of EOUs as mentioned in

pg. 151
 Gazette Notification No. SO. 194(E) dated 6.3.2000;

l) 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);

m) 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;

n) Registration-cum-Membership Certificate Function as a

Registering authority for EOU / EHTP / STP / BTP unit. A
separate Registration–cum–Membership Certificate shall not be
required in their cases as provided for in Paragraph 2.56 of FTP ;

o) Green Card Issue of Green Card automatically after execution of

LUT;

p) 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;

q) Publicity of EOU / EHTP / STP / BTP Scheme under their

jurisdiction.

r) Exit from EOU/EHTP/STP/BTP Scheme (including grant of ‘in-

principle’ exit letter as per Appendix 6K).

6.35 Change of Location / Inclusion of Additional Location with BOA

Approval
BOA may consider change of location of EOU / EHTP / STP / BTP unit from
place mentioned in LoP to another and / or to include additional location
outside territorial jurisdiction of original DC / Designated Officer, subject to
such conditions as BOA may decide.

6.36 Clearance of Capital Goods in DTA

Clearance of capital goods, including second hand, in DTA shall be allowed as
per para 6.14(b) of FTP and import policy in force on date of such clearance.

6.37 Depreciation Norms

Depreciation up to 100% is permissible for Computers and Computer

pg. 152
 peripherals in 5 years and 10 years in case of other items.
(a) Depreciation Norms for Computers and Computer Peripherals:
Depreciation for computers and computer peripherals shall be as follows.
10% for every quarter in first year;
8% for every quarter in second year;
5% for every quarter in third year;
1% for every quarter in fourth and fifth year.

(b) Depreciation Norms for Other Capital Goods:

For capital goods, other than above, depreciation rate would be as follows:

4% for every quarter in first year;

3% for every quarter in second and third year;

2.5% for every quarter in fourth and fifth year;

2% for every quarter thereafter.

6.38 Conversion
a) Existing DTA units, may also apply for conversion into an EOU
/EHTP / STP / BTP unit, but no concession in duties and taxes
would be available under scheme for plant, machinery and
equipment already installed. For this purpose, DTA unit may
apply to DC / Designated Officer concerned in same manner as
applicable to new units. In case there is an outstanding export
commitment under Advance Authorisation Scheme, it will follow
the procedure laid down in Appendix 6M of Appendices & ANFs.
In case DTA unit has taken EPCG authorisation, the conversion
would be permitted only if either the unit has fulfilled the
stipulated Export obligation and obtained EODC or has made
payment of applicable duties and taxes and compensation cess on
capital goods imported under the EPCG Scheme.
b) Existing EHTP / STP / BTP units may also apply for conversion /
merger to EOU unit and vice-versa. In such cases, units will
continue to avail permissible exemption in duties and taxes as
applicable under relevant scheme. EHTP / STP/ BTP units
desiring conversion as an EOU may apply to DC concerned
through Officer designated by MeitY / DoBT in same manner as

pg. 153
 applicable to new units. Likewise, EOU desiring conversion into
EHTP / STP / BTP may apply to officer designated by MeitY /
DoBT through DC concerned.
c) An EOU may be shifted to SEZ with approval of DC provided EOU
has achieved pro-rata obligation under EOU scheme.

6.39 Fast Track Clearance Procedure

a) Eligibility: EOUs having a status holder certificate under FTP shall
be eligible forFast Track Clearance Procedure.
b) Examination of Import Cargo: Status holder units shall be
exempted from examination of import cargo at port of import.
However, jurisdictional Commissioner of Customs may examine
consignments at unit’s place on random basis.
c) Installation of Computers: Eligible EOUs may install two
computers in their administrative / registered office outside
premises of the unit under prior intimation to jurisdictional Asstt.
/ Deputy Commissioner of Customs.
d) Procurement of DG sets: Procurement of DG set of capacity
commensurate with actual requirement of unit shall be permitted
under intimation to DC and jurisdictional Customs authority.
e) Temporary removal of Capital Goods: Eligible EOU may remove
their capital goods or parts thereof for repairs under prior
intimation to jurisdictional Asst. / Deputy Commissioner of
Customs or Central Excise.
f) Personal carriage of samples: Personal carriage of samples of
Gems & Jewellery by status holder EOUs are allowed subject to
limit fixed in Paragraph 6.24 without a need for prior permission
from DC / Customs.
g) Activities which do not require permission: In respect of following
activities of a status holder, permission will not be required from
DC or jurisdictional Central Excise/Customs authority: DTA sale of
finished products in terms of Paragraph 6.07(a) of FTP;
Participation in exhibition and Personal carriage of Gems &
Jewellery for export promotion tours subject to fulfilment of
conditions of Paragraph 6.23 of HBP. However, prior intimation
thereof needs to be given.

6.40 Time Bound Disposal of Applications

DC shall dispose of applications expeditiously. Following time schedule shall
pg. 154
normally be followed to dispose of applications provided application is
complete in all respects and is accompanied with prescribed documents.

S. Category of Application Time limit

No. for disposal
(days)
1 Issue of LoP / LoI 15
2 Conversion of LoP / LoI 15
3 Acceptance of LUT 3
4 Renewal of LUT 3
5 Permission for broad banding / Diversification 3
6 Permission for change in locations 7
7 Permission for Advance DTA sale 2
8 Permission for merger of units 7
9 Permission for enhancement of production capacity 3
10 Cancellation of LoP 3
11 Permission for debonding / exit 7
12 Permission for DTA sale 2
13 Eligibility certificate for employment visa for lower 2
leveltechnicians
14 Issue of Green Card 2
15 Renewal of Green Card Same
Day
16 Permission to lease CG 1
17 Permission for disposal of scrap / waste 2
18 Permission for change in name 2
19 Inter Unit Transfer 2
20 Wastage Norms, ad-hoc 2
21 Permission for re-import Same
day
22 Permission for re-export Same
day
23 Permission for replacement / repair of goods Same
day
24 Authorisation of softex form 1
25 Reimbursement of CST claims 7
26 Issue of GSP Certificate Same
day
27 Permission for conversion of EOU to STPI/EPCG 5
28 Permission of final exit of EOU 5
29 Permission of extension of EOU 2
30 Permission to allow increase in value of CG 2
pg. 155
31 Permission for export through exhibition / tour 2
32 Reimbursement of Duty Drawback / TED 7

pg. 156