Benefits and Incentives under EOU Scheme
FDI Policy
- 100% Foreign Direct Investment permissible;
- Exemption from industrial licensing requirement for items reserved for SSI sector.
FDI Policy
- Sunset Clause under Section 10B of the Income Tax Act has been extended by 1 year. This clause provides exemption from income tax to 100% EOUs. This exemption was available for the export affected till 31 March 2010, however was extended till 31 March 2011.
Indirect tax Incentives
- Nil import duty;
- Nil Excise Duty on procurement of goods from DTA;
- Reimbursement of CST paid on inter-state purchases from DTA;
- Reimbursement of duty paid on furnace oil procured from domestic oil companies, as per the notified drawback rates.
Liberal Exchange Controls
- 100% export earnings maintainable in Dollar A/c - minimal restrictions on business payments outside India from dollar balances;
- Extended credit period (one year) for export realization;
- Re-export of defective imports/imports on loan basis permitted without G.R. waiver.
Other Incentives
- Sub-contracting permissible;
- Inter-unit transfer of goods/services permitted;
- Capital goods may also be transferred on loan basis to other EOUs (with prior permission);
- Scrap/waste/remnants/unutilized materials/surplus or obsolete capital goods may be exported or sold in DTA on payment of duties;
- Option of availment of Export Promotion Capital Goods (EPCG) in the event of exit from the Scheme;
- Job work on behalf of domestic exporters for direct export allowed;
- Units may procure finished goods from DTA for consolidation with export products with the prior approval of the BOA and subject to fulfillment of prescribed conditions;
- EOUs permitted to:
- Export goods for holding participating in overseas exhibitions;
- Export goods for display/sales in permitted shops overseas;
- Set up show rooms/retail outlets at International airports.
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