Eou and job work

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CA Sandeep Kumar

CA Sandeep Kumar (Querist)

02 February 2015 Can 100% EOU may job work for DTA Unit.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)

03 February 2015 Yes admissible.

Refer to para 6.14(a) of foreign trade policy

(a) (i) EOU / EHTP / STP / BTP units, including
gems and jewellery units, may on the basis of annual permission from Customs authorities,
subcontract production processes to DTA
through job work which may also involve
change of form or nature of goods, through job
work by units in DTA.

(b) (i) EOU may, with annual permission from
Customs authorities, undertake job work for
export, on behalf of DTA exporter, provided
that goods are exported directly from EOU and
export document shall jointly be in name of
DTA / EOU. For such exports, DTA units will
be entitled for refund of duty paid on inputs by
way of brand rate of duty drawback.

Further please see the para 6.12 (e)of foreign trade policy 2009-2014

Unit will not be required to furnish bank guarantee at the time of import or going for job work in DTA,
where unit has
(i) a turnover of Rs. 5 crores or above;
(ii) unit is in existence for at least three years;
and
(iii) The unit:
(a) has achieved positive NFE / export
obligation wherever applicable;
(b) has not been issued a show cause notice or
a confirmed demand, during the preceding
3 years, on grounds other than procedural
violations, under the penal provision
of the Customs Act, the Central Excise
Act, the Foreign Trade (Development &
Regulation) Act, the Foreign Exchange
Management Act, the Finance Act, 1 994 covering Service Tax or any allied Acts
or the rules made thereunder, on account
of fraud / collusion / willful mis-statement
/ suppression of facts or contravention of
any of the provisions thereof;

CA Sandeep Kumar

CA Sandeep Kumar (Expert)

03 February 2015 I have gone through the above and found one of the condition that export should be made directly from eou and document filed jointly. Is there any provision in which an eou can utilize their spare capacity by doing job work for outsider and return goods him.

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