Recommendations of the Committee on Review and Revamp of EOU Scheme regd. - SEZ - No. 1/10/2010-EOU

No. 1/10/2010-EOU Government of India Department of Commerce Udyog Bhawan, New Delhi Dated 2 nd January, 2014 OFFICE MEMORANDUM Sub : Recommendations of the Committee on Review and Revamp of EOU Scheme regd: The undersigned is directed to refer to the above mentioned subject and to say that a Committee was constituted by the Government to Review and Revamp of Export Oriented Unit (EOU) Scheme with a mandate to suggest suitable steps to make the scheme more vibrant and attractive for investors, develop a synergy between the EOU scheme and SEZ scheme to make them complementary to each other and aligning the EOUs to make them more globally competitive. 2. The recommendations submitted by the Committee were subsequently examined in consultation with line ministries. Based on such consultation, the following measures are taken to implement the accepted recommendations: Validity of the period of Letter of Permission (LOP) issued to EOU: LoP issued to an EOU will have an initial validity for a period of 2 years to enable the Unit to construct the plant and install the machinery. The next 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 UAC subject to condition that two-thirds of activities including construction, relating to the setting up of the Unit are complete and a Chartered Engineer's certificate to this effect is submitted by the Unit. Subsequent extension, if necessary, will be granted by the Board of Approval. Aligning duration of goods and services in EOU with the term of LOP: At present, capital goods are required to be installed or otherwise used by the EOU, within a fixed period from the date of import or procurement thereof and other goods are to be used in connection with the production or packaging of goods within a period of three years. In case of failure to use within above stated period, extension is required. It has now been decided that the period of usage of goods should be co-terminus with the period of LOP. This would do away with the current practice of obtaining multiple extensions for goods and LOP separately. Setting up warehousing facilities outside EOU premises and outside the jurisdiction of DC: EOUs which intend to have their warehouses near to the port of export to reduce lead time for delivery of goods overseas and to address unpredictability of supply orders will now be permitted to set up such warehouses subject to the provisions related to export warehousing as given in notification No. 46/2001-Central Excise(N.T.) dated 26.6.2001 and the CBEC Circular No. 581/18/2001-CX dated 29.6.2001 as amended. Sharing of facilities among EOU/STP/EHTP/SEZ Unit: In order to allow optimal utilization of infrastructure facilities it has been decided that sharing of facilities among EOUs may be considered by the UAC on case-to-case basis and the recommendations be sent to the BoA for final approval. While accepting such proposals, the NFE obligations of the Units shall not be altered. However, sharing of facilities between EOIJs and SEZs Units should not be permitted. Inter-Unit transfer (IUT) of goods services : In order to facilitate a group of EoUs which sources inputs centrally to obtain bulk discount, reduce cost of transportation and other logistics cost and to maintain effective supply chain, IUT of goods and services will be permitted on a case to case basis by the UAC. Further, the procedure for Inter-Unit Transfer (IIJT) of finished goods will be clarified by CBEC in order to bring uniformity in the practices and procedure adopted by various field offices. Self-warehousing and self-certification of goods imported/procured by EOUs: The scheme of self-warehousing and self-certification was introduced vide Circular No. 19/2007- Cus. dated 3.5.2007 dispensing with the requirement for physical verification of imported/indigenously, procured duty-free goods before issuing re-warehousing certificate by the proper officer in respect of Units set up under EOU/EI-ITP/STP/BTP scheme having physical export turnover of Rs.15 Crore and above in the preceding financial year and having a clean track record. In order to extend self-warehousing and self-certification facility to more Units, it has been decided to reduce the limit of physical turnover from Rs 15 Crore to Rs 10 Crore. Rationalization of reports/ returns to be filed by EOUs: EOUs submit Quarterly Performance Report (QPR) and Annual Performance Report (APR) to the Development Commissioners and monthly return ER-2 to Central Excise. In order to reduce multiplicity of these reports, a common return to DoC and DoR would reduce paperwork for the EOUs. It has, therefore, been decided that a single common report/return may be devised which may serve the purpose for DoC as well as DoR. A joint group of DoC and DoR including Director General of Systems, CBEC will be formed to devise a proforma exhaustively capturing all the data and figures relating to export, import, DTA sale, deemed export sale, IUT, sale of goods as such, destruction, payment of duty etc. and devise simplified records,to be maintained by EOUs. Extension of time for submitting shipping bill for export made under self-sealing / self certification: It has been decided to increase the mandatory requirement to submit Shipping Bill within 24 hrs to 48 hrs as it is sometimes difficult to reach jurisdictional Central Excise office within 24 hrs from the port of export. 3. The above issues with the approval of Competent Authority. (Madhup Vyas) Deputy Secretary to the Government of India E mail : [email protected] Tel No.: 23063294 Fax No.: 23063418 To: DoR, DGFT, All DCs