100% EOU

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 June 2011 We have recently registered as EOU unit in VSEZ, we are basically into export of Software. And know we got to know that there is no tax exemption for 100% EOU 10B. And if we want to convert into SEZ unit what is the process and tax obligations. Please suggest the best solutions - vamshi

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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23 June 2011 SEZs are areas where export production can take place free from plethora of rules and regulations governing imports and exports. Units operating in these zones have full flexibility of operations and can import duty free capital goods and raw material. The movement of goods to and fro between ports and SEZ are unrestricted. The units in SEZ have to export the entire production. The first two SEZs are being set up at Positra in Gujarat and Nangunery in Tamil Nadu. At the same time, Santacruz Electronic Export Promotion Zone, Kandla Export Promotion Zone, Vizag Export Promotion Zone and Cochin Export Promotion Zones have been proposed to be converted in SEZs.

REFER TO PARA 6.36.3 OF HAND BOOK OF PROCEDURES VOL-1(2009-2014) AN EOU MAY BE SHIFTED TO SEZ WITH THE APPROVAL TO DEVELOPMENT COMMISSIONER PROVIDED 100% EOU HAS ACHIEVE PRO-RATA OBLIGATION UNDER EOU SCHEME.

REGARDS,

for more info :-

http://www.stpiconsultancy.com/services.html#1

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RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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23 June 2011 Obligations under SEZ Unit:-
It is compulsory for every SEZ units in India to achieve positive net foreign exchange earning as per the formula given in paragraph Appendix 14-II (para 12.1) of Handbook of Procedures, Vol.1. For this particular purpose, a legal undertaking is required which has to be executed by a separate unit of the Development Commissioner. The is responsible for providing periodic reports to the Development Commissioner and Zone Customs as provided in Appendix 14-I F of the Handbook of Procedures, Vol.1

Role of State Government in Establishment of SEZ Units
State Governments play a very active role to play in the establishment of SEZ unit. Any proposal for setting up of SEZ unit in the Private / Joint / State Sector is routed through the concerned State government who in turn forwards the same to the Department of Commerce with its recommendations for consideration. Before recommending any proposals to the Ministry of Commerce & Industry (Department of Commerce), the States Government properly checks all the necessary inputs such as water, electricity, etc required for the establishment of SEZ units. The State Government has to forward the proposal with its recommendation within 45 days from the date of receipt of such proposal to the Board of Approval. The applicant also has the option to submit the proposal directly to the Board of Approval. Representative of the State Government, who is a member of the Inter-Ministerial Committee on private SEZ, is also consulted while considering the proposal.

Ramesh verma

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