Export Oriented Units Scheme
EOU full form is "Export Oriented Unit". The Export Oriented Units (EOU) scheme was introduced to boost exports, increase foreign earnings and create employment in India. The EOU scheme is complementary to the scheme for the Free Trade Zone and the Export Processing Zone. Units that are undertaking to export their entire production of goods are allowed to set up as an EOU. In this article, we look at the Export Oriented Units scheme in detail. Know more about the applicability of GST on Export Oriented Units.Export Oriented Units
Export-oriented units are units undertaking to export their entire production of goods. EOUs can engage in manufacturing, services, development of software, repair, remaking, reconditioning, re-engineering including making of gold/silver/platinum jewellery and articles. Further, units involved in agriculture, agro-processing, aquaculture, animal husbandry, biotechnology, floriculture, horticulture, pisciculture, viticulture, poultry, sericulture and granites can also obtain the status of EOU.Benefits of Export Oriented Units
The Export Oriented Units enjoys the below following benefits- EOUs has a permit to procure raw material or capital goods duty-free, either through import or through domestic sources;
- EOUs are eligible for reimbursement of GST;
- EOUs are eligible for reimbursement of duty paid on fuels procured from domestic oil companies;
- EOUs are eligible for claiming input tax credit on the goods and services and refund thereof;
- Fast track clearance facilities;
- Exemption from industrial licensing for the manufacture of items reserved for SSI sector.
Eligibility Criteria for EOU
For the status of EOU, the project must have a minimum investment of Rs.1 crore in plant and machinery. This condition does not apply for software technology parts, electronics hardware technology parks and biotechnology parks. Further, EOU involved in handicrafts, agriculture, animal husbandry, information technology, services, brass hardware and handmade jewellery does not have any minimum investment criteria.Obtaining EOU Status
To obtain EOU status, application for setting up of unit under EOU scheme must be made to the Board of Approval. In the case of approving, they provide validity of Letter of Permission for setting up EOU. The Letter of Permission will have an initial validity of 2 years to enable the unit to construct the plant and install the machinery. Further, a person can obtain an extension for a period of upto one year. On starting operation, in a period of 5 years, the EOU will have to achieve positive net foreign exchange earning cumulatively.Application and Approval
Applications for setting up of units under the EOU scheme, other than proposals for setting up of units in the services sector (except for R&D, software and IT-enabled services, or any other service activity delegated by BoA), shall be approved or rejected by the Units Approval Committee within 15 days as per criteria.Exit from EOU Scheme
With the approval of DC, an EOU may opt-out of the scheme. These exits shall subject to a penalty of Excise and Customs duties and industrial policy in force. In case the unit has not achieved obligations, it shall be taxable to a penalty at the time of exit. In case of gems and jewellery unit ceasing its operation, the gold and other precious metals, gems, alloys and other materials available for the manufacture of jewellery, is given to an agency specified by DoC, at a price to be determined by that agency.Popular Post
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