Exports

1. EXPORT ORIENTED UNIT

2. The purposeof this schemewas basically to boost exports by
creating additional production capacity with certain minimum value
addition.
INTRODUCTION

3. OBJECTIVES OF THE EOU SCHEME
Stimulate
direct foreign
investment
Transfer of
latest
technologies

4. OBLIGATION OF EOU
The EOUs are required to achieve Positive Net
Foreign Exchange Earning (NFE).
NFE shall be calculated cumulatively for a period of Five
years from the date of commencement of production.
Input / output norms to be maintained as per FTPon
the resultant product.
Unutilized material can be disposed on payment of
applicable duties.

5. BENEFITS OF EOU
All the imports to units are customs duty free.
Exemption from Central Excise Duty for the procurement of Capital
Goods and Raw Materials from domestic market.
 Units are entitled to sell the product in local market upto 50% of
the
products exported in value terms.
 100% of foreign equity is permissible.
 Reimbursement of Central Sales Tax (CST) paid on domestic
purchases.
 No restrictions on External Commercial Borrowings.
 Full freedom for sub-contracting.
 EOUs are free to select the location of a project.
 Exemption from paying electricity duty.

6. BENEFITS CONT….
 Fast Track Clearance Scheme (FTCS)for clearances of
imported
consignments for EOU.
Sub-contracting to DTAunits permissible after obtaining permission
on annual basis.
 Unutilized raw material can be disposed of on payment of applicable
duties.
The unit can exit with permission of DevelopmentCommissioner,
on payment of applicable duties.
 Prescribed percentage of foreign exchange earnings can be retained
in
EEFC account in foreign exchange.
EOUscan export through an export house/trading house/star
trading house or other EOUs.

7. MAJOR SECTOR IN EOU
COFFEEE
FOOD
PROCESSI
NG

8. ELIGIBILITY CRITERIA
An EOU can be set up by any entrepreneur for manufacturing
of goods and also for rendering services.
An EOU can be set up for repair, reconditioning, re-making and
re- engineering also.
An EOU unit is required to achieve only positive Net
Foreign Exchange Earning (NFE) over a period of 5 years.
 Trading activity is not allowed in the EOU Scheme.
 EOU can also be set up in the sectors like agriculture , animal
husbandry, aquaculture, floriculture, horticulture, viticulture, etc.

9. BASIC REQUIREMENTS FOR SETTING UP AN EOU
Planning your venture
 Is it on your own
 With foreign participation and nature of participation (foreign investment
allowed 100%)
What product do you intend to manufacture
 Product/By-product
 Does it requires clearance from Central/State Government authorities
 Is it an SSI Unit. If so, registration is required as an SSI.
Technology to be used
 Indigenous / foreign.
 Related costs and conditions.
Feasibility report
 On your own or with help of consultant.
The finances involved
 Land, structure, buildings etc (Please note, building construction material
is not exempted from duty).

10. SALIENT FEATURES
 No licence required for import ( except restricted items)
Exemption from Central Excise Duty in procurement of capital goods,
raw materials, consumables, spares, packing material etc from the
domestic market.
 Exemption from Customs duty on import of capital goods,
raw-
materials, consumables, spares, packing material etc.
Reimbursement of Central Sales Tax (CST) paid on domestic
purchases (but no local tax).
Supplies from Domestic Tariff Area (DTA) to EOU treated as
deemed exports.
 100% Foreign direct investment permissible.
 Exchange earners foreign currency (EEFC) Account.
Facility to retain 100% foreign exchange proceeds in EEFC account.
Facility to realize & repatriate export proceeds within 12 months.

11. CONT….
 Re-export of imported goods found defective for
repair/replacement, testing/ calibration and return.
Access to domestic market upto 50% FOB value of export on payment
of concessional rate of duty.
 Job work on behalf of domestic exporters for direct export allowed.
Conversion of existing Domestic Tariff Area (DTA) unit into an
EOU permitted.
 New EOUs get Corporate Income Tax concessions till 2009 .
 Even second hand plant & machinery can be imported.
Can Procure duty-free inputs for supply of manufactured goods to
advance licence holders.
 EOUs get upto 5 years for utilization of imported capital goods, and
upto 3
years for other items.

12. THANK
YOU