EOU Scheme

Export Oriented Unit Scheme - Meaning, Rules & Regulation for EOU Status And Advantages of EOU Scheme Introduction In order to improve exports, boost foreign profits, and generate jobs in India, the Export Oriented Units (EOU) programme was implemented. The Export Processing Zone and Free Trade Zone schemes complement one other. Units are permitted to establish themselves as an EOU if they commit to exporting 100% of their produced items. In this article information such as Export Oriented Unit Scheme meaning, Advantages of EOU Scheme, and information on EOU Status. Meaning of Export Oriented Unit Scheme EOUs are organizations that commit to exporting all of their products and services. Any organization that engages in the following activities is eligible to become an EOU: Producing, rendering services, Software creation, jewellery and item repair, reconditioning, and re-engineering, Units involved in horticulture, agricultural, animal husbandry, poultry, biotechnology, and other related fields. However, the EOU (Export Oriented Unit) Scheme plan does not apply to trading units. Advantages of EOU Scheme EOU Scheme are qualified to receive GST reimbursement, and they have permission to purchase raw materials or capital products duty-free, whether through importation or domestic sources. Export Oriented Unit Scheme, is eligible to claim Input Tax Credits on the goods and services and to be reimbursed for any taxes paid on fuels purchased from domestic oil firms. Quick clearance processes. Manufacturing of goods designated for the SSI sector is exempt from industrial license requirements. Rules and Regulation for Export Oriented Unit Scheme According to the FTP (Foreign Trade Policy), projects with a minimum investment in plant and machinery of INR 1 crore may be taken into consideration to construct EOU. Existing units working in hardware technology, biotechnology parks, software technology, information technology and services, agriculture, animal husbandry, handicraft, and hand-crafted jewellery are exempt from this criteria. Such EOUs might be permitted to be founded with less stringent investment requirements. According to Section 3 and the First Schedule of the Customs Tariff Act of 1975, 100% EOUs are exempt from paying Basic and Additional Customs Duty. Inputs used to produce completed goods supplied to DTA by payment of GST (Goods and Service Tax) shall not be exempt from payment of Basic Customs Duty. The Customs Tariff Act's Section 3 extra duties, if any, are still exempt from the exemption. How to Obtain EOU Status? Getting EOU Status A request for the establishment of a unit under the EOU plan must be presented to the Board of Approval in order to receive EOU status. If they approve, they guarantee the legality of the Letter of Permission for establishing the EOU. For the unit to build the plant and install the machinery, the Letter of Permission will initially be effective for two years. A person may also request an extension for a time frame of up to one year. The EOU must start off with positive cumulative net foreign exchange earnings within five years of operation. Application and Approval of EOU Status The Units Approval Committee must approve or reject applications for the establishment of units under the EOU scheme within 15 days of submission, with the exception of proposals for units in the services sector (excluding R&D, software and IT-enabled services, and any other service activity delegated by Board of Approval). Exit from the Export Oriented Unit Scheme After receiving approval from the Deputy Commissioner (DC) of Customs, an EOU may choose to leave the programme. However, such withdrawal is conditional upon payment of all applicable Excise and Customs taxes, IGST, SGST, CGST, and compensating Cess, if any, in accordance with the industrial policy in effect. Additionally, if the unit was unable to fulfil its commitments, it would be charged a fee at the time of leaving. All of the gold and other precious metals available for the creation of gems and jewellery are handed to the agency designated by DC (Deputy Commissioner) at a price decided by that agency if the firm ending operations is engaged in that industry. Conclusion In an effort to boost exports and hence raise net foreign exchange gains, the Export Oriented Unit (EOU) Scheme was established in 1981. The primary objective of EOU Scheme is to increase export from the country and to improve foreign exchange currency and employment in a country.

EOU Scheme

All you need to know on EOU (Export Oriented Unit) Scheme