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TMI BlogEOUs/EPZ/EHTP/STP Units --- clarifications on provisions of EXIM Policy vis-à-vis Excise & Customs NotificationsX X X X Extracts X X X X X X X X Extracts X X X X ..... ew activity, viz. Trading 2. Paragraph 9.1 of the EXIM Policy lists various activities, viz. Manufacture, services, development of software, agriculture etc. for which a unit can be set up under development of software, agriculture etc. for which a unit can be set up under EOU/EPZ/EHTP/STP Scheme. A new activity, viz. `trading’ has been included in this paragraph. This has been subsequently elaborated in paragraph 9.21, as per which trading units would be allowed to import/procure from DTA goods duty free for the purpose of exports. The trading units may also undertake re-packing, labeling, minor processing etc. for which they shall be eligible for duty free procurement of packing, labeling materials etc. and the required capital goods. Further, the trading units may also procure goods without payment of duty from other EOU/EPZ/EHTP/STP units for exports. The trading units shall be required to achieve positive NFEP and export performance as prescribed in Appendix 1 of the Export and Import Policy. 3. The provision concerning trading units in Paragraph 9.21 is in lieu of the earlier Paragraph, which dealt with setting up of private bonded warehouses in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, under para 9.9 (g) of the Policy, the software units were allowed DTA sale in any mode including on-line data communication upto 50% of FOB value of exports. Under the amended provision, DTA sale of service upto 50% of foreign earned against sale of such services has been allowed. It means that in case services are sold in DTA against foreign exchange, the unit shall be entitled to DTA sale upto 50% of foreign exchange earned against such sale of services. Supplies to bonded warehouses authorised to carry out manufacturing operations in bond 8. As per Paragraph 9.10 (d), supplies to bonded warehouses set up under 11.14 of the Policy are counted towards fulfillment of NFED and export performance. In the same paragraph, an amendment has been made to include bonded warehouses authorized to carry out manufacturing operations in bond under Section 65 of the Customs Act, 1962, meaning thereby that supplies made by EOU/EPZ/EHTP units of these warehouses shall also be counted towards fulfillment of export obligation and NFEP. As per the existing notifications, supplies from EOU/EPZ/EHTP units to bonded warehouses registered or appointed under Notification No. 26/9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng duty free import/procurement by EOU/EPZ/EHTP units have been amended suitably to provide that destruction of capital goods shall be allowed by the Assistant/Deputy Commissioner of Customs/Central Excise in charge of the EPZ/EOU/STP/EHTP units without payment of duty. Such destruction shall be carried out in the presence of Customs/Central Excise officer inside the Zone or outside the Zone/unit, where it is not permissible or possible to carry out destruction within the Zone/unit. The officers supervising destruction may exercise due caution to ensure that capital goods are destroyed fully rendering them unit for further use and give certificate to that effect. After destruction of capital goods, if the remains have scrap value, the same may be cleared by the unit in DTA on payment of duty applicable to scrap. Replacement/Repair of imported/indigenous goods 13. Paragraph 9.24 has been amended to allow replacement of goods imported and found to be defective, either from the foreign suppliers or from their authorised suppliers in India. It may please be noted that in the case of replacements from the authorised suppliers in India, such authorised supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite processing EOU/EPZ units without payment of duty. The granites quarried shall not be allowed to be sold in DTA. The granite manufacturing/processing units under EOU/EPZ Scheme would be governed by notifications applicable to EOU/EPZ units and the granite quarrying unit shall be governed by the notification Nos. 58/2000-Cus, dated 8.5.2000 and 37/2000-CE, dated 8.5.2000 referred to above. Disposal of scrap/waste/remnants 16. As per para 9.30 of the HOP, scrap/waste/remnants arising out of the production upto 5% of FOB value of exports are allowed to be sold in DTA. In case waste/scrap/remnants generated is more than 5%, it shall be approved by Development Commissioner in accordance with the norms provided in Appendix 41 of HOP. In the revised edition of HOP, the limit i.e. 5% of FOB value of exports has been withdrawn. The waste/scrap/remnants shall be allowed as per the norm stipulated in Appendix 41 of HOP. For items not covered by Appendix 41, the norms shall be fixed by the Board of Approval. Depreciation norms for capital goods 17. As per para 9.35 of HOP, at the time of debonding, depreciation upto 90% is allowed in respect of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the specific purposes. In recent past, a number of proposals has been received regarding setting up of units under STP scheme for the purpose of export of Call Centre Services in addition to development of software. Considering that the Call Centre Service is a growing area of export and has substantial potential for foreign exchange earning, notification Nos. 138/91-Cus and 140/91-Cus both dated 22.10.91 have been amended to include Call Centre Services as one of the purposes under STP scheme. Duty free import of DG Set by STP Units 20. Hitherto, STP units were not allowed to import captive power plants and captive generating sets duty free under notification Nos. 138/91-Cus and 140/91-Cus, both dated 22.10.91. However, the same was allowed under notification No. 1/95-CE, dated 4.1.95. In order to provide a uniform Policy in this area, notification Nos. 138/91-Cus, dated 22.10.91 and 140/91-Cus, dated 22.10.91 have been amended so as to allow STP units to import captive power plants and captive generating sets without payment of duty. Duty free import of Additional Items for Software Exports 21. Notification No. 153/93-Cus, dated 13.8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . These units are not amendable to physical bonding. Therefore, the units are allowed to import/procure duty free only some specified goods. HSD is not included in the duty free import category. Ministry of Commerce have been requesting persistently that HSD is an essential item required by the aquaculture and agriculture units and, therefore, it should be allowed duty free. Considering the erratic power situation in the country and the fact that the units are allowed to import/procure DG sets duty free, it has been decided to allow duty-free import/procurement of HSD by the aquaculture and agriculture sector on the basis of the recommendation of the Board of Approval. In other words, BOA will fix norms for each unit on the basis of which duty-free import/procurement of HSD should be allowed. The units importing/sourcing indigenously duty free HSD shall maintain proper account of import/procurement and utilisation of such duty free HSD, in the same way as accounts of duty free imported/indigenously sourced goods are being maintained by any other bonded EOUs. Notification Nos. 196/94-Cus, dated 8.12.94, 10/95-CE dated 23.2.95 and 126/94-Cus, dated 3.6.94, 136/94-CE dated 10.12.94 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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