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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 ..... ties, 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 the EPZs. It may be noted that in case of these units the usual entitlements like DTA sale, deemed export bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 bond8. 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. 26/98-CE (NT) dt. 15.7.1998 are allowed without payment of duty. Notifications governing duty free import/procurement by EOU/EPZ/EHTP units have been amended suitably to allow supplies from these export oriented units to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 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 goods13. 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 suppliers shall not be eligible for any duty free import against such replacements of defective imported goods made to EOU/EPZ/STP/EHTP units. Duty-free import facility for additional items14. Paragraph 9.8 of HOP [Handbook of Procedures, Vol.1] provides the list of items, which are allowed to be imported duty free by E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 8.5.2000 referred to above. Disposal of scrap/waste/remnants16. 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 goods17. As per para 9.35 of HOP, at the time of debonding, depreciation upto 90% is allowed in respect of capital goods. The maximum limit (i.e.90%) is achieved over a period of 8 years. For computer and computer peripherals, accelerated depreciation was allowed i.e. the limit of 90% was achieved over a period of 4 years and 3 months. Under the revised HOP, further accelerated depreciation for computers and computer peripherals has been provided i.e. maximum limit of 90% would be achieved over a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Units20. 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 Exports21. Notification No. 153/93-Cus, dated 13.8.93, allows duty free import of telematic infrastructural equipment for software exports under the STP scheme. The equipments imported under this notification are used for creating a Central facility for the purpose of export of software. Ministry of Information Technology has requested for inclusion of additional items, which are stated to be required for setting up of STP Complexes. These additional items are uninterrupted power supply, diesel generating sets, servo control system, air conditioner, private automatic branch exchange, fax machine, video projection system, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendation 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 have been amended to allow duty free import/procurement of HSD for use in the diesel generating sets by aquaculture/agriculture sector EOUs, on the recommendation of the Board of Approvals. Other Issue25. In the notifications governing duty free procurement of indigenous goods by EOU/EPZ, there is a provision that the EOU/EPZ units are allowed to clear the goods (including rejects, wastes, scraps and remnants) into DTA on payment of appropriate duty of excise. In Budget 2000-2001, notification No. 1/95-CE, dated 4.1.95, governing duty free procurement of indigenous goods by EOU/EHTP/STP units has been amended to provide that the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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