Investment in 100% Export Oriented Units

Investments can also be made in 100% Export Oriented Units (EOUs), which are not located in SEZ, but are eligible for several export-related benefits.

The salient features of the investment and trade regulations for such units are:
	Foreign investment upto 100% is allowed with full repatriation on an automatic basis
	Industrial inputs, including capital goods, are fully exempt from customs duty, excise duty and sales tax (under a legal undertaking to pay duties if exports do not materialise as committed)
	Exemption from sales tax and excise duties (VAT) on all domestic purchases of capital goods, raw materials and inputs
	All goods - including those exclusively reserved for small scale industries- may be manufactured
	sales in the domestic tariff area is allowed up to 50% of the value of exports, on payment of a concessional import duty and subject to the fulfilment of export obligations and value addition norms
	Export oriented units may be de-bonded after five years, after payment of import duties on the residual value of the goods, provided they have achieved the committed foreign exchange and export undertakings.
	EOUs and Free Zone units are fully exempt from income tax up to April 2010.

Applications for setting up export-oriented units can be made to the concerned Development Commissioner of the EPZ or to the Secretariat of Industrial Approvals, and may be cleared under an automatic route or by specific approvals, as set forth in the guidelines.

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