Deduction u/s 10B

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This query is : Resolved

Jayesh Jagetiya (Querist)

29 April 2009 Dear Friends,
We have a Manufacturing units having major of its sales as Export.
We are in process of converting this unit to 100% EOU.
Whether we will get Benifit u/s 10B?

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)

29 April 2009 Though the process of conversion needs various foremalities. you will get 100% EOU status if your 95% sales are export sales.

I am sure if this % got changed.

chetan soni

chetan soni (Expert)

29 April 2009 To get the exemption u/s 10B following few conditions needs to be fulfill :
01. It should not be formed by splitting/ reconstruction of business
02. It should not be be formed by transfer of old machinery or plant previous used for any purpose in india
03. 90% of sales should be oversea market.
04. Employment of 20 or more workers
05. It should manufactured eligible articals or things.
06. There must be repatriation of sales proceeds in india
07. Audit report in form 56F

Thats it. I hope this will clear you doubt.

Jayesh Jagetiya

Jayesh Jagetiya (Querist)

29 April 2009 The conditions 2,3,5,6,7 we will be fullfiling.
But i have following doubt for condition 1&4.

Condition 1: What is the definition of Reconstuction / splitting? We have an existing business & converting the existing unit only in 100% EOU, there is no other change in business. Is this Reconstruction / split?

Condition 4:- We already have more than 100 employees in that Unit, so they will be automatically employee of new unit. will this suffice or we have recruit new 20 employees?

Now exemption available?

taxindiaconnect

taxindiaconnect (Expert)

01 May 2009 The deduction u/s 10B for an EOU is available only up to AY 2011-12 or FY 2010-2011. If all the conditions mentioned herein are met the deduction may be availed for two years that is FY 2009-10 and 2010-11.
However the following condition are not in existence –
No condition as to 90% of exports sales, it is only that the unit should be Net foreign exchange NFE positive.
No condition as to employment of minimum no of employees. That condition is applicable to a unit claiming deduction u/s 80I.You need not hire new employees.
Condition of splitting of business - An exiting unit may be converted in to EOU, however for this the unit originally when started should not have been formed by splitting of an exiting business.

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