1. Summary
  2. Objectives of EOU Scheme
  3. Incentives/facilities available to EOUs


Export Oriented Unit Scheme or EOU Scheme is one every of the export promotion schemes of the govt of India and is alive since 1980. Sector Specific EOU Schemes are referred to as software Technology Park (STP) Scheme for export of software, Electronic Hardware Technology (EHTP) Park Scheme for export of electronic Hardware; or Biotechnology Park (BTP) Scheme for export of Bio-Technology merchandise. underneath the EOU Scheme, producing or service sector units are allowed to be originated with the target of commercialism entire production of products factory-made or services except for restricted sale in Domestic Tariff space (DTA) as provided underneath the Foreign Trade policy (FTP). The EOU scheme is developed by the Government of India within the Ministry of Commerce & trade. The provisions of the EOU Scheme are contained in Chapter half-dozen of the Foreign Trade policy (FTP); Chapter half-dozen of enchiridion of Procedures (HOP), Vol. I and Public Notices /Circulars issued by the Department of Commerce. institution of units and their performance is monitored by the territorial Development Commissioner (DC) by the FTP provisions. Since Customs bonding is obligatory for EOUs, the Scheme envisages a vital role for Customs & Central Excise Department. Corresponding notifications facultative duty exemption are issued by the CBEC underneath Customs Act, 1962 and Central Excise Act, 1944. equally different agencies like the banking company of India (RBI), Central Board of Direct Taxes (CBDT), board of directors General of Foreign Trade (DGFT), etc. have issued notifications /Circulars for correct implementation of the Scheme together with birth down procedures thence.

Objectives of EOU Scheme

Objectives of EOU Scheme Main objectives of the EOU Scheme are as under:-

  • Boosting exports;
  • Earning foreign exchange;
  • Attracting foreign investment;
  • Generating employment;
  • Backward and forward linkage by the approach of sourcing stuff from and provide of finished merchandise to DTA;
  • Attracting the latest technology into the country;
  • Upgrading the ability and making the supply of skillful man-power;
  • Development of backward space.

Incentives/facilities available to EOUs

Various incentives/facilities on the market to EOUs, in brief, are as under: –

  • Duty-free imports or acquisition from warranted Warehouse /International Exhibitions of inputs, consumables, workplace or different capital merchandise (including second-hand Capital goods), etc. [vide notification No. 52/2003-Customs, dated 31.03.2003].
  • acquisition of products from Domestic Tariff space while not payment of Central Excise duty [vide notification No. 22/2003-Central Excise, dated 31. 03.2003].
  • provides by DTA manufacturer are eligible for deemed export advantages underneath Chapter eight of FTP, that embrace disadvantage, refund of Terminal Excise Duty and issue of Advance Authorisation facultative duty-free import to the DTA provider.
  • Full compensation of Central excise on merchandise purchased from DTA against C-Form for the manufacture of products for export.
  • Export financial gain exempted from payment of taxation (up to 31.3.11).
  • DTA Sale (including advance DTA sale) up to five-hundredths of F.O.B price of exports (i.e. Physical Exports) allowable on payment of Concessional rate of Central Excise duty[vide notification No. 23/2003-Central Excise, dated 31.03.2003].
  • solely positive internet interchange earnings (NFE) to be achieved over an amount of 5 years.
  • Duty-free merchandise (except Capital Goods) to be used over an amount of three years.
  • an Export yield to be realized at intervals an amount of twelve months. Retention allowed up to 100 percent of export earnings in the EEFC Account.
  • provides created in DTA underneath Paragraph 2.9 of FTP & provides to different commercialism units/Bonded Warehouse are counted for the aim of the fulfillment of positive NFE.
  • merchandise allowed to be equipped duty-free in DTA against Advance Authorization/ DFIA issued by DGFT.
  • Job-work/sub-contracting for or from DTA allowable subject to fulfillment of sure conditions.
  • Import/export of products together with precious goods allowable through personal carriage & Foreign Post workplace.
  • FDI up to 100 percent allowable as per the rules of the Department of business Policy and Promotion.
  • Exemption from Industrial Licensing for the manufacture of things reserved for the SSI sector.
  • software system Units are allowed to use pc systems for coaching functions (including industrial training).
  • EOUs are allowed to put in one fax machine and 2 computers outside the warranted space of the unit.
  • Depreciation up to 100 percent permissible on capital merchandise. On debonding, the duty to be paid on the depreciated price of the capital merchandise.