Eou exemption

This query is : Resolved

Dhanyakumar Jain (Querist)
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25 October 2013 X ltd has identified a plot of barren land in India for constructing a Laboratory with an intention to export 100% of its research services and thus avail an EOU Status. For the purpose of construction of research lab, X ltd will import capital goods (which includes electrical items, HVAC and other capital items). X ltd will place the import order for purchase of these capital items immediately with construction in progress. How can X ltd avail EOU benefits for the purchase of these capital goods? What documentary procedure will it require to follow?

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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09 November 2013 para 6.6.1 of foreign trade policy

"(a) On approval, a Letter of Permission (LoP) / Letter of Intent (Lol) shall be issued by DC / designated officer to EOU / EHTP / STP / BTP unit. LoP / Lol shall have an initial validity of 3 years, by which time unit should have commenced production. Its validity may be extended further up to 3 years by competent authority. However, proposals for extension beyond six years shall be considered in exceptional circumstances, on a case-to-case basis by BoA. Once unit commences production, LoP / Lol issued shall be valid for a period of 5 years for its activities. This period may be extended further by DC for a period of 5 years at a time.

(b) LoP / Lol issued to EOU / EHTP / STP / BTP units by concerned authority, subject to compliance of provision in para 6.2 above, would be construed as an Authorisation for all purposes.

(c) Unit shall execute an LUT with DC concerned. Failure to ensure positive NFE or to abide by any of the terms and conditions of LoP / Lol / IL / LUT shall render the unit liable to penal action under provisions of the FT (D&R) Act and Rules and Orders made thereunder, without prejudice to action under any other law / rules and cancellation or revocation of LoP / Lol / IL.

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https://www.caclubindia.com/experts/eou-exemption-1488449.asp#.Un3c8SdHhkg

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