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DTA sales by a 100%EOU

Vandana Mishra (Practice) (29 Points)

06 December 2007

Can a 100% EOU STPI unit,which has newly started ( has no Foreign exchange earnings) make any sales in DTA .If so how?

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11 Replies

(Guest)

Do you have the permission to move in DTA?

Vandana Mishra (Practice) (29 Points)
Replied 07 December 2007

Well as per STPI approval we can make DTA sales as per entitlement...but since thre is no export turnover( being the operations just commenced) is there a possibility of getting a DTA sales approval

(Guest)

Do you have any Advance DTA sale Permissionon on the basis of Projected Export Sale of the first year from Development Commissioner ?? If not, you can apply for the same and get the sale done.

Vandana Mishra (Practice) (29 Points)
Replied 07 December 2007

Can you let me know what are the chance of getting Advance DTA sales approval and how to go about it-the procedure thereof?

(Guest)

You can follow the Foreign Trade Policy, Chapter – 6, Clause (6.8 K), the same is mentioned below : clause - 6.8 DTA Sale of Finished Products/ Rejects Waste/ Scrap/ Remnants and By-products The entire production of EOU/EHTP/STP/BTP units shall be exported subject to the following: (a) Units, other than gems and jewellery units, may sell goods upto 50% of FOB value of exports subject to fulfillment of positive NFE on payment of concessional duties . Within the entitlement of DTA sale, the unit may sell in DTA its products similar to the goods which are exported or expected to be exported from the units. No DTA sale at concessional duty shall be permissible in respect of motor cars, alcoholic liquors, books and tea (except instant tea) or by a packaging/ labeling /segregation/ refrigeration unit/ compacting/micronisation/pulverization/granulation /conversion of mono-hydrate form of chemical to anhydrous form or vice-versa and such other items as may be notified from time to time. Sales made to a unit in SEZ shall also be taken into account for the purpose of arriving at FOB value of export by EOU provided payment for such sales are made from EEFC Account. Sale to DTA would also be subject to mandatory requirement of registration of pharmaceutical products (including bulk drugs). (b) For services, including software units, sale in the DTA in any mode, including on line data communication shall also be permissible up to 50% of FOB value of exports and /or 50% of foreign exchange earned, where payment of such services is received in foreign exchange. (c) Gems and jewellery units may sell upto 10% of FOB value of exports of the preceding year in DTA subject to fulfillment of positive NFE. In respect of sale of plain jewellery, the recipient shall pay concessional rate of duty as applicable to sale from nominated agencies. In respect of studded jewellery, duty shall be payable as applicable. (d) Unless specifically prohibited in the LOP, rejects may be sold in the Domestic Tariff Area (DTA) on payment of duties as applicable to sale under paragraph 6.8(a) on prior intimation to the Customs authorities. Such sales shall be counted against DTA sale entitlement. Sale of rejects upto 5% of FOB value of exports shall not be subject to achievement of NFE. (e) Scrap/ waste/ remnants arising out of production process or in connection therewith may be sold in the DTA as per the Standard Input-Output norms notified under the Duty Exemption Scheme on payment of concessional duties as applicable within the overall ceiling of 50% of FOB value of exports. Such sales shall not, however, be subject to achievement of positive NFE. In respect of items not covered by the norms, the Development Commissioner may fix ad-hoc norms on the basis of data for a period of six months and within this period, he shall get the norms fixed by the BOA. Sale of waste/scrap/remnants by units not entitled to DTA sale or sales beyond the DTA sale entitlement, shall be on payment of full duties. The scrap/waste/remnants may also be exported. (f) There shall be no duties/taxes on scrap/waste/ remnants in case the same are destroyed with the permission of Customs authorities. (g) By-products included in the LOP may also be sold in the DTA subject to achievement of positive NFE on payment of applicable duties within the overall entitlement of paragraph 6.8(a). Sale of by-products by units not entitled to DTA sales or beyond the entitlements of paragraph 6.8 (a) shall also be permissible on payment of full duties. (h) EOU/ EHTP/ STP/BTP units may sell finished products, which are freely importable under the Policy in the DTA under intimation to the Development Commissioner against payment of full duties provided they have achieved the positive NFE. (j) In case of DTA sale of goods manufactured by EOU/EHTP/STP/BTP , where basic duty and CVD is nil, such goods may be considered as non-excisable for the purpose of payment of duty. (k) In case of new EOUs, advance DTA sale will be allowed based on its estimated exports for the first year .

Ramesh Kothari (Manager-EOU commercial) (161 Points)
Replied 21 December 2007

Yes u can get the Advance permission for DTA from concern development commissioner on basis of subsequent export in near future on basis of firm order fm ur buyer under para6.8(a) of FTP 2004-09 in prscribed format
Annexure 14-I-H of Policy books

Ramesh Kothari
09437009074
rameshkothari2159 @ rediffmail.com

CA S Sundararajan (CAO) (536 Points)
Replied 24 January 2008

Yes, Mr.Kothari

(Guest)

Yes can get the DTA Sales permission in Advance with prior permission from Concern DC as I already reply on 21.12.07 msg

babu (employee) (0 Points)
Replied 18 October 2008

Originally posted by :Vandana Mishra
"	Can a 100% EOU STPI unit,which has newly started ( has no Foreign exchange earnings) make any sales in DTA .If so how?	"

Deepti JK (Intern) (22 Points)
Replied 09 June 2009

I have an urgent query:

Payment made by DTA to SEZ in INR-is it deemed foreign exchange? It is, but which RBI Circular says so? I cant find the RBI/DGFT Circular/Notification that can be relied on for precisely that information.

Tally Gyan (MBA) (430 Points)
Replied 13 May 2010

hello A!!

Now i'm in trouble so plz u must help me........I'm in accountant of IT firm.There software Developing & It Enabled Service's are Export. so now we need of DTA sales permission.For this Furnish the DTA sale Approvel application form submit to STPI (mohali).i request to all, tell me that how can i fill the DTA sales form.