The objectives of the Government under these schemes are to promote exports, enhance foreign exchange earnings, attract foreign/domestic investment for export promotion and generate employment in the Country.
The entities that wish to export their entire production of goods and services may set up units under the following schemes:
- Export Oriented Unit (‘EOU’) Scheme:
- Electronics Hardware Technology Park (‘EHTP’) Scheme,
- Software Technology Park (‘STP’) Scheme, or
- Bio-Technology Park (‘BTP’) Scheme.
The units’ operating under the above Schemes are allowed to manufacture goods including repair, re-making, reconditioning, re-engineering, and rendering of services, where such entities intend to export their entire production of goods and services. Trading units are not covered under these schemes.
The primary characteristics of the Scheme are as follows:
- May import and /or procure from bonded warehouse in DTA or from an international exhibition held in India without payment of customs duty / IGST / GST compensation cess.
- Restriction on the limit on the entitlement of DTA sale has been removed.
- Inter unit transfer has been allowed on payment of applicable duty & taxes.
- Goods exported and found defective /damaged or returned by the importer shall be allowed clearance by the Customs Authority.
- Import of second-hand goods for the purpose of repair /refurbishing/ recondition/ reengineering have been made free.
- Export of replacement goods has been eased for issuing export license on replacement items which are restricted or in SCOMET list.
An EOU/EHTP/STP/BTP unit may export all kinds of goods except which are specifically prohibited in ITC and these units should be positive net foreign exchange-earners. There are various benefits for units operating under these Schemes. A Few of them are listed below:
- No license for import of goods.
- Exemption from duties of customs on import of capital goods, raw materials, etc.
- Foreign Direct Investment to the extent of 100% is permissible.
- Deductions under Income-tax Act.
- Single window clearance approval scheme.
- Reimbursement of goods and service tax.
How ASC Helps:
- Our team of professionals understand the different schemes under the Foreign Trade Policy and assist our clients in the following ways:
- Eligibility under the Schemes.
- Analyze the business of the client to check which Scheme would be more beneficial to it.
- Analyze the benefits available under the Scheme to the client and how these benefits can be availed.
- Preparation and filing of the application under the Schemes.
- Assistance for various compliances under the Schemes.