INTRODUCTION ON EOU
• Introduced on 31st December 1980,by Ministry of Commerce.
• Purpose: to boost exports by creating additional production capacity
• Notification No. is 52/2003
DUTY FREE IMPORTS ALLOWED UNDER EOU SCHEME:
• CAPITAL GOODS
• SECOND HAND CAPITAL GOODS
• GOODS FOR REPLACEMENT
• RE-IMPORT OF GOODS REPAIRED ABROAD
INTRODUCTION ON EOU
• Decision are taken by Board Of Approvals(BOA) ,under Ministry of Commerce.
• EOU’s are licensed to manufacture goods within the bonded premises.
– Period of bond is 5 years (extendable for another5 years with the permission of
development of commissioner)
• EOU can be set up by any entrepreneur for manufacturing of goods and also
for rendering services.
• EOU can be set up for repair, reconditioning ,re-engineering also.
• EOU unit is required to achieve only positive NFE over a period of 5 years.
DOCUMENTS REQUIRED FOR EOU UNITS
• Letter Of Permission (LOP)
• Private Bonded Warehouse (PBW) (sec 58).
• Inbound Manufacturing Sanction Order (IMSO)(Sec 65).
• B-17 bond with B.G (Bank Guarantee).
• B-17 block transfer from division/Procurement Certificate.
• Legal Agreement for 100% EOU units. (LUT)
PROCEDURE FOR EOU
• Application for registration to Deputy/ Asst. Commissioner of customs at port of import.
Accompanied with following documents :
– All import document, Copy of LOP, Green card.
• The B/E should filled and assessed at the place of import documents.
• B-17 block transfer should be debited for movement of goods (Procurement Certificate in
case if unit is located outside i. e not within the city limits)
• After all clearance formalities goods shall be sent to bonded premises of the EOU.
• Inspector will inspect the goods to ensure their quality, marks and numbers etc and issue
Recent Policy Changes in the EOUs Scheme
• Procurement and export of spares/components up to one and half percent of the FOB
value of exports will be allowed to the same consignee/buyer of the export article
within the warranty period.
• In order to facilitate the smooth functioning of the EOU units, the Development
Commissioners will fix time limits for finalizing the disposal of matters relating to
• New units engaged in export of Agriculture/Horticulture/Aqua-Culture products have
been now allowed to remove capital goods inputs to the DTA farm on producing bank
guarantee equivalent to the duty foregone on the capital goods/input proposed to be
• The EOU units in Textile Sector are allowed to dispose off the left over
material/fabrics up to 2 per cent of Cost Insurance Freight (CIF) value of imports, on
consignment basis. Recognizing that settling the accounts for every consignment is
complex and time consuming it has been decided to allow disposal of left over
material on the basis of previous year's imports.
Software Technology Parks of India
• For the promotion of Software exports from the country, the Software Technology Parks of India was set up
in 1991 as an Autonomous Society under the Department of Electronics and Information Technology.
• The services rendered by STPI for the Software exporting community have been statutory services, data
communications servers, incubation facilities, training and value added services.
• STPI has played a key developmental role in the promotion of software exports with a special focus on
SMEs and start up units.
• The STP Scheme has been extremely successful in fostering the growth of the software industry. The
exports made by STP Units have grown many folds over the years.
Software Technology Parks of India
• The STPI Scheme is lauded as one of the most effective schemes for the promotion of exports of IT and
ITES. The 52 STPI centres that have been set up since inception of the programme have given a major boost
to IT and ITES exports.
• The strength of the scheme lies in the fact that, it is a virtual scheme, which allows, software companies to
set up operations in the most convenient and cheapest locations and plan their investment and growth
solely driven by business needs.
• STP Scheme is a pan India Scheme, which has centres spread across India, Currently there are 4,000 export
units registered with STPI.
• As per 2011-12 data, the 52 STPI centres in the country registered exports worth Rs 2.26 lakh crore in
2011-2012 which increased to Rs 2.42 lakh crore in 2012-13.
ADVANTAGE OF BECOMING A STP UNIT
• STP units can avail of following advantages under STP scheme :
– Custom duty exemption
– Excise duty exemption
– Central Sales Tax reimbursement
– Equipment can also be imported on loan or lease basis.
• A company can set up STP unit anywhere in India.
• All the imports of Hardware & Software in the STP units are completely duty free. All relevant
equipment/goods including second hand equipment can be imported (except prohibited items)
CHARGES FOR STP REGISTRATION
• Application processing fees and three years advance annual service charges considering your
pojected export turnover.
• Application processing fees: ` 2500/• Service charges on the basis of projected exports :
Below Rs. 50 lakhs per annum
Rs. 15000.00 per annum
Rs. 50 lakhs to Rs. 3 crores per annum
Rs. 50000.00 per annum
Above Rs. 3 crores per annum
Rs. 100000.00 per annum
WHO CAN BECOME A STP MEMBER
AND HOW ?
• Following can become a STP member :
– An Indian company
– A subsidiary of foreign company
– A branch office of foreign company
• In order to become a certified member unit under STP scheme, approval from the competent
authority i.e. Director, STPI is required.
• After approval procedure, STP unit has to sign Export Obligation Agreement under STPI and
approach the Assistant Commissioner of Customs for bonding your office area under Section 58
& 65 of Customs Act 1962.
ACTIVITIES PERMITTED UNDER THE STP
• Development of enterprise application software
• Development of Technology Software
• Any other category of Software development
• IT enabled services.
CHENNAI: Nearly 1,000 software exporters have withdrawn their registration from Software Technology Parks of
India (STPI) in the last two years. Exporters pressed the exit button after a March 2011 government directive which
withdrew tax sops to software exporters.
STPI scheme, introduced in 1991, was meant to incentivise and encourage software exports in the country. However,
when tax exemptions went away, firms started moving out.
"Situation is not that grim. In around the same period 200 new firms, many of them product companies, joined STPI.
The new National Policy on Information Technology (NPIT) and one on Electronics are expected to boost the
sector," said Omkar Rai, Director General of STPI.
Currently there are 4,000 export units registered with STPI. As per 2011-12 data, there were 52 STPI centres in the
country. These centres registered exports worth Rs 2.26 lakh crore in 2011-2012 which increased to Rs 2.42 lakh
crore in 2012-13.
These units are still exporting through STPI as it is still the licensing authority for exports. Many of them might move
to Special Economic Zones (SEZs) to avail of benefits there but the really small ones among them may find it hard
to negotiate, said Rai.
FOREIGN TRADE POLICY
- SMITA SANTOKI
ELECTRONIC HARDWARE TECHNOLOGY PARK
Something about EHTP
electronic hardware items including
hard disk drives, computers,
television, etc., such parks have
been developed by the Ministry of
Communications & Information
Technology. An Electronic Hardware
Technology Park (EHTP) may be an
individual unit by itself or a unit
located in an area designated as
As in the case of STP Scheme,
the EHTP Scheme is also
administered by the Ministry
Information Technology. An
EHTP can also be set up by the
Central Government, State
private sector undertakings or
any combination of them.
BENEFITS to EHTPs
• Free Import of duty capital goods, raw materials, components and other related inputs
(excluding prohibited items list).
• EHTPs are duty free and bonded areas and customs exemptions are extended accordingly.
• An EHTP is exempted from the payment of corporate income tax up to 2014 and also central
sales tax reimbursement.
• An EHTP may gear up to 100 per cent foreign equity.
• An EHTP unit may be setup for both software and hardware in an integrated manner.
BENEFITS to EHTPs
• No restrictions on External Commercial Borrowings.
• Full Freedom for sub-contracting.
• Exemption from payment of Central Excise Duty on goods procured from DTA on goods
manufactured in India.
• Units will be allowed to retain 100% of its export earning in the EEFC account.
• Allowed to sell products manufactured by them up to a limit of 90% instead of existing 75%.
• EOUs will now be allowed CENVAT Credit facility for the component of SAD and Education
Cess on DTA sale.
The government is likely to soon announce measures to revive investor interest in Export Oriented
Units (EOUs), a move that will help boost shipments overseas and contain current account deficit.
CAD touched a record high of 4.8 per cent of GDP in 2012-13. During April-August,
India's exports grew by 3.89 per cent to USD 124.4 billion. After expiry of tax benefits for
the EOUs, the government in 2011 had set up a committee under the chairmanship of S
C Panda, Development Commissioner, Noida SEZ, to revamp the scheme in sync with
the changing business environment and gel with the Special Economic Zones. The
committee had recommended 32 measures which included host of tax incentives like
exemption from customs duty, central excise and service tax. "However, the government
is unlikely to provide any kind tax incentives to EOUs. The government is mulling to
provide investment-linked incentives to these units ," the official said, adding that "things
will be finalised in about 10 days".
Officials from the Commerce and Revenue department have
already held several rounds of meetings on the recommendations
of a committee to revamp the 30-year old EOU scheme. "We are
considering several steps including simplification of procedures for
EOUs. The steps will help in making EOUs more investors friendly
as investments in these units have declined over the period," a
senior official in the commerce ministry told PTI. Besides, revival of
these units would help boost India's exports and reduce CAD, the
difference between the inflows and outgo of foreign exchange.
Economic Times, 27th sept 2013
The committee had suggested several procedural simplifications and steps to reduce
transaction cost in order to arrest the declining trend in setting up of EOUs and their
exports. The EoU scheme, introduced in December 1980, had allowed manufacturing
units in the Export Processing Zones to enjoy 100 per cent income-tax exemption on
profits from overseas sale and also duty free import of raw material. As the scheme had
a sunset clause, the tax benefits were stopped from March 2010. This scheme was
immensely used by SMEs sector for setting up their units for export purpose. The
objective was to encourage additional production capacity in manufacturing sector by
attracting foreign investment and create employment in the country. Besides, it had also
suggested rationalisation of administrative mechanism for setting up an EOU, setting up
warehousing facilities outside the unit premises and sharing of facilities among
EOU/STP/EHTP/SEZ unit. Apart from EOUs, the scheme includes Electronics Hardware
Technology Parks (EHTPS) and Software Technology Parks (STPS). Till 2009-10, 2,586
EOUs, 8,121 STPs and 144 EHTPs were operating in the country. EOUs had made
export of goods and services worth Rs 84,135 crore, besides exports from STPs and
EHTPs of Rs 2,05,505 crore and Rs 8,028 crore respectively in 2009-10
• Biotech Park is a special form of industrial park that specialized in biotechnology.
• Biotechnology is a fast emerging sector and is expected to play a key role in the new
• Realising the immense potential of biotechnology, India began its initiatives in this
sector in the 1980s.
• The Department of Atomic Energy (DAE), the Department of Biotechnology (DBT), the
Department of Science and Technology (DST) and the Department of Scientific and Industrial
Research (DSIR) are the government bodies.
• The Indian biotechnology industry registered an annual growth rate of 36.55 percent over INR
3,475 crores in 2003-04
• Biotech Park and Incubation Centers have been established at Lucknow, Uttar Pradesh and
Shapoorji Pallonji Biotech Park, Genome Valley, Hyderabad (Andhra Pradesh)
INTERNATIONAL BIOTECH PARKS
• International Biotech Park Ltd. is a 81 acre Park dedicated to Biotechnology in the field of
Life Sciences, Chemical, Pharmaceutical, Biotech products and processes. IBP is the
largest developed biotech park in India which provides space for R & D as well as for
• There is also a 25 acres of notified Special Economic Zone for Biotechnology products and
processes. Currently 75% of the project has been developed and occupied by leading
pharmaceutical and biotechnology companies
BENEFITS TO BTPS
• Contributes 20% of Industrial output
• Strength in Research & Development sector
• State of the art Educational Facilities
• Annual exports from units in IBPL - Rs. 200 crores
• Total number of employees in the park - 1300
• Packaged Effluent Treatment plant
International Biotech Park at Pune set to expand
Promoters plan to add 150 acres more to existing facility