Conversion of DTA unit to EOU Unit - Central Excise Practice Manual (OLD) - Central Excise

Conversion of DTA unit to EOU Unit Existing DTA units are allowed to be converted into an EOU unit. However, such DTA units are not eligible for any concessional duty in respect of plant, machinery and equipment already installed. The detailed procedure/ guidelines for conversion of DTA unit into EOU have been laid down by DGFT in Error! Hyperlink reference not valid. I. The DTA unit intending to get converted into EOU unit is required to apply to the concerned Development Commissioner/Director, STPI in the manner as applicable to the new units. Once the project is approved by the Development Commissioner/Director, STPI, LOP is issued to the unit. The unit is required to execute a Letter of Undertaking(LUT) in the format prescribed in Appendix 14-I-O of HOP, Volume I , with DC /Director, STPI. After completion of above formalities, the unit can apply for private bonded warehousing license to the concerned Central Excise Authorities and execute B-17 bond . As per the guidelines prescribed by DGFT, in case, where there is an outstanding export obligation under Advance Authorization Scheme, the raw materials obtained against advance authorization, which is still having valid export obligation period, can only be carried forwarded to EOU. In case, where there is outstanding export commitment under EPCG scheme, the same would be added to the future export obligation. This is done by adding value of imported capital goods under EPCG Scheme to the value of imported capital goods by the EOU. All the previous obligations under EPCG scheme would cease to exist on such conversion.