EXPORT ORIENTED UNITS

1. Can a DTA Unit convert to EOU?

• An existing DTA unit may also apply and convert into an EOU.
  
• While allowing such a conversion, the existing unfulfilled export obligation of the DTA unit shall be subsumed into those of the EOU.
  
• No concession in duties and taxes will be available for plant, machinery and equipment already installed.

2. Is there a one-point servicing of EOUs ?

The Development Commissioner of the Zone concerned is more or less the one point servicing official agency for EOUs. He has wide powers including the following:-

• To adjust for currency fluctuation, in case of capital goods import
• Enhancement of production capacity
• Broad banding/diversification of product range
• Change in name or ownership
• Change of location/expansion
• Extension of validity of Letter of Permission
• To adjudicate in all matters
• To issue eligibility certificates for grant of employment visa to certain categories of foreign technicians to be engaged by EOUs.

3. What is bonding ?

Bonding means a simple procedure whereby the production premises of the Unit is designated as a duly authorised place where the duty free imported/domestically procured material can be stored or used.

B-17 Bond

• B-17 Bond is a surety bond taken to cover almost all the activities of the unit. These include:
• Transhipment of import/export goods between port of import/export and units premises.
• Duty free import/procurement from the indigenous sources as per relevant notification and warehousing/storage in the unit.
• Movement of duty free goods for job work and return.
• Temporary clearance for repair and display in exhibition, testing/approvals etc
• Movement of goods against AR-4, AR-3A, and CT-3 etc and transfer from one warehouse to another.
• The Bond amount is equal to 25% of the duty foregone of the capital goods required in the next 5 years plus duty foregone on the value of raw material required for a period of 3 months. In the event of a valid Surety to the Bond not being arranged, a further security @ 5% of the Bond amount has to be furnished.