100% EOU Registration
The EOU scheme was introduced in the year 1980 vide Ministry of Commerce resolution dated 31st December 1980. The purpose of the scheme was basically to boost exports by creating additional production capacity. The EOU scheme is complementary to the EPZ scheme, except that it is widely dispersed in location, unlike EPZs, which are set up at specific locations.
The Export Oriented Unit (EOU) Scheme, which had been introduced in the early 1980s remains in the forefront of country’s export production schemes. The scheme has witnessed many changes over the last twenty-four years in the context of ever changing economic realities. However, the basic premise remains the same. This premise is that the exporters are treated as a special class and given the required tariff, non-tariff and policy support to facilitate their export efforts. Thus, today the EOU Scheme has emerged as a dynamic policy initiative facilitating the exporting community in the task of increased exports. Earlier, the scheme was basically for manufacturing sector with certain minimum value addition in terms of export earnings. The EOU scheme is presently governed by Chapter 6 of the Foreign Trade Policy 2004-09 and Chapter 6 of the Handbook of Procedures and Appendix 14 I A to Appendix 14 I N.
A 100 per cent export-oriented unit is an industrial unit offering for export its entire production, excluding the permitted levels of domestic tariff area sales for manufacture of goods, including repair, re-making, reconditioning, re-engineering and rendering of services. Trading units are not covered under this scheme. EOU means an export oriented unit for which an LOP (letter of permission) has been issued by the Development Commissioner.
Units can be set
100% EOUs fall into 3 categories
- EOUs established anywhere in India and exporting 100% products except certain fixed percentage of sales in the Domestic Tariff Area (DTA) as may be permissible under the Policy.
- Units in Free Trade Zones in Special Economic Zones (SEZs) and exporting 100% of their products.
- EOUs set up in Software Technology Parks (STPs) and Electronic Hardware Technology Parks (EHTPs) of India for development of Software & Electronic Hardware.
- The Prescribed Application form in triplicates as per Appendix 14 I-A is to be submitted to relevant Development Commissioner Office.
- A complete Project Report with all Commercial, Financial & Technical Viability is to be accompanies by the application
- A demand draft of Rs. 5,000/- and drawn in favour of “Pay & A/c Officer, Ministry of Commerce & Industry, Dept. of Commerce is to be enclosed with application
- The documents demanded by the concerned DC For approval to the EOU are described in the Appendix 14-IB.
- Letter of Permission (LOP) from DC through form given in Appendix 14-IE.
- Legal undertaking (LUT) using form given in Appendix 14-IF.
- Registration-cum-Membership Certificate (RCMC)from DC
- A Green Card by the Zone Administration
- Import Export Code ( IEC)
- Small Scale Industry (SSI) Registration from the pertinent District Idustries Center (DIC)
- Private Custom Bonded Warehouse License U/s 58 and 65 of the Customs Act,1962.
- Sate Government Sales Tax Act and Central Sales Tax Act.
Who is eligible to become an EOU?
An EOU can be set up by any entrepreneur for manufacturing of goods and also for rendering services. An EOU can be set up for repair, reconditioning, re-making and re-engineering also.
Trading activity is not allowed in the EOU Scheme
EOU unit is required to achieve only positive Net Foreign Exchange (NFE) over a period of 5 years.
Policy for EOU is given in Chapter-6 Foreign Trade Policy and Chapter 6 of Handbook of Procedure (Vol. – I)
EOU can also be set up in the following sectors: -
- Animal Husbandry
- Poultry or