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SEZ Horizon SEZ Enquiry Advertise with us

Santosh HatwarShreepad B Devale

Exported Oriented Units:

Units undertaking to export their entire production of good & services may be set up under the EOU scheme

Procedural Aspects:

Application for setting up, to be made to-

◊ Board of approval '(BOA) for approvals of units in service sector
◊ 'Development Commissioner ' (DC) for EOU's requiring industrial licensing, after getting clearance from Board of Approval (BOA) & Department of Industrial Policy & Promotion (DIPP) within 45 days
◊ Units Approval Committee (UAC) for OTHER units

Development commissioner & EOU:

Development commissioner (DC) issues letter of permission (LOP) or letter of Intent (LOI) to EOU ON approval. Then, WITHIN 3 years, the unit should start commercial production to get a validity period of 5 years from the date of commercial production for its activities. The units shall execute a legal undertaking with the concerned DC. The DC ensures, smooth functioning of EOU and fixing time limits for finalizing the disposal of EOU matters.

Positive net foreign exchange (NFE):

The net foreign exchange earning shall be calculated cumulatively for a block of 5 years.

Start export house status:

Depending on its export performance for last 3 years, it will also be eligible for Fast Track Clearance procedure.

Incentives/Benefits from central government to 100% EOU:

◊ Total Customs & Central excise duty exemption.
◊ Income tax exemptions (Section 10A, 10B, etc……)
◊ Reimbursement of Central sales tax (CST) on purchases made from Domestic Tariff area (DTA)
◊ Exports through third party permitted
◊ No restrictions on foreign shareholding and 100% convertibility of export earnings at market rate
◊ Unrestricted remittances of profits and dividends
◊ Supply of goods to EOU = "deemed exports" and eligible for benefits like advance authorization, deemed export drawback & exemption from terminal excise duty.

How SEZ is different from EOU???

Supplies made to SEZ from DTA are "Exports", in respect to EOU they are treated as "Deemed Export"

Units to be located within specified Zones in respect to SEZ, where as for EOU units can be set up at any prescribed places as declared.

In SEZ there is physical control of over movement of good, no such control in case on EOU

No minimum investment limit for SEZ, where as for EOU minimum investment limit in P&M is Rs.100 lakhs as on date of commercial production

Customs clearance with in zone itself, for EOU fast track clearance scheme for clearance of imported consignments

Supplies from SEZ to DTA is normal, whereas for EOU sale within India on payment of excise duty /customs duty of similar goods is payable and sometimes as a % of normal customs duty

In respect to sales (SEZ) no limit, except to have positive net foreign exchange (NFE), (EOU) sale UPTO 50% (FOB on sales of previous year) in DTA and has to fulfill positive net foreign exchange.

In relation to restriction under companies act on managerial remuneration are not applicable for SEZ, applicable for EOU

Physical exit is necessary in case of de-bonding as SEZ, for EOU unit can exit (de-bond) with permission of Development Commissioner, on payment of applicable duties.

SEZ supplier need not pay CST or service tax, EOU has to pay CST or service tax but eligible for refund.

Procedure for purchase the Imported Raw Material/ Capital Goods

  • You will get the Commercial Invoice (from Party) & Bill of Lading (From Custom office). (1+ 3 copies). Then you make the Procurement Certificate (3 copy) & send it to 1) Deputy Comm. 2) Company copy 3) Range Then File the P.C. copy and update in Procurement Cert. Register
  • Then Goods will come with Bill of entry (1 copy)
  • Intimate to Range office (Ext. No. 316, 318) & do the verified
  • Entry in Bond Register -warehousing Register of Cap. Goods/ R.M.
  • Then Xerox the bill of entry & take the sign of Range officer and send them to 1)Dy. Comm. 2)Asst. Comm. 3) Company copy 4) Range

Procedure for purchase the Indigenous Raw Material/ Capital Goods

  • First you get the Purchase Order from Purchase Dept.
  • Make the Form CT – 3 as per the Purchase Order. Take the Sign of Factory manager/Authorized Signatory and sign of Superintendent.
  • Distribute that 3 copies to 1)Customer 2) Range 3) company copy
  • File the CT- 3 Copy and update in the CT-3 Register
  • Then Goods will come with Invoice (Party's) and ARE -3 (3 copies)
  • Intimate to Range office (Ext. No. 316, 318) & do the verified
  • Entry in Bond Register-warehousing Register of Cap. Goods/R.M.
  • Then Send the ARE-3 (duly signed by superintendent) to 1) company copy 2) Range 3) Customer, and Reware-housing letter to customer & for us.
  • Then update in ARE-3 Issued Register & Reware-housing Register

Procedure for Warehousing & Re-warehousing of Capital Goods / Raw Material

  • When Goods come against CT-3 / Procurement Certificate/ Duty Payable, immediately inform to excise office as intimation of goods came.
  • After verification, Entry will be in WG 06-07 Excel Register.
  • When Invoice will come with A.R. 3-A, entry will be in WG-1/2 Physical Register (Hard Copy).
  • Sign the A.R.3-A copy by F.M. / Authorized Signatory + Superintendent, original copy for us and then send the second copy to the party and third copy to Excise Office.
  • Take the sign of Factory manager / Authorized Signatory + Inspector on Warehousing Register also.
  • File the Original A.R.3-A + Transporter copy (Invoice) in the Party's Invoice File.

Procedure for Warehousing of Goods in Warehousing Register

  • The entry will be in Warehousing Register When Goods comes against CT-3 / Procurement Certificate/Duty Payable.