Guidelines to close an EOU, EHTP or STP units part 1

The information provided here is part of Online Export Import course



How to shut down a STP/EHTP/EOU unit?

 

GUIDELINES FOR EXIT OF EOU/EHTP/STP UNITS

 

Guidelines to close an EOU, EHTP or STP units part 1This post explains about the procedures and formalities to exit STP,EOU or EHTP unit. The below details are the extract of Foreign Trade Policy of India.

 

As per FTP, with approval of Deputy commissioner, an EOU may opt out of scheme. Such exit shall be subject to payment of Excise and Customs duties and industrial policy in force. If unit has not achieved obligations, it shall also be liable to penalty at the time of exit. In the event of a gems and jewellery unit ceasing its operation, gold and other precious metals, alloys, gems and other materials available for manufacture of jewellery, shall be handed over to an agency nominated by DoC, at price to be determined by that agency. An EOU / EHTP / STP / BTP unit may also be permitted by DC to exit from the scheme at any time on payment of duty on capital goods under the prevailing EPCG Scheme for DTA Units. This will be subject to fulfilment of positive NFE criteria under EOU scheme, eligibility criteria under EPCG scheme and standard conditions indicated in HBP.

 

Unit proposing to exit out of EOU scheme shall intimate DC and Customs and Central Excise authorities in writing. Unit shall assess duty liability arising out of de-bonding and submit details of such assessment to Customs and Central Excise authorities. Customs and Central Excise authorities shall confirm duty liabilities on priority basis, subject to the condition that the unit has achieved positive NFE, taking into consideration the depreciation allowed. After payment of duty and clearance of all dues, unit shall obtain “No Dues Certificate” from Customs and Central Excise authorities. On the basis of “No Dues Certificate” so issued by the Customs and Central Excise authorities, unit shall apply to DC for final de-bonding. In case there is no proceeding pending under FT(D&R) Act, as amended, DC shall issue final de-bonding order within a period of 7 working days. Between “No Dues Certificate” issued by Customs and Central Excise authorities and final de-bonding order by DC, unit shall not be entitled to claim any exemption for procurement of capital goods or inputs. However, unit can claim Advance Authorisation / DFIA / Duty Drawback. Since the duty calculations and dues are disputed and take a long time, a BG / Bond / Instalment processes backed by BG shall be provided for expediting the exit process.

 

In cases where a unit is initially established as DTA unit with machines procured from abroad after payment of applicable import duty, or from domestic market after payment of excise duty, and unit is subsequently converted to EOU, in such cases removal of such capital goods to DTA after de-bonding would be without payment of duty. Similarly, in cases where a DTA unit imported capital goods under EPCG Scheme and after completely fulfilling export obligation gets converted into EOU, unit would not be charged customs duty on capital goods at the time of removal of such capital goods in DTA when de-bonding.

 

 

An EOU / EHTP / STP / BTP unit may also be permitted by DC to exit under Advance Authorization as one time option. This will be subject to fulfillment of positive NFE criteria. A simplified procedure may be provided to fast track the De-bonding/ Exit of the STP / EHTP Unit which has not availed any duty benefit on procurement of raw material, capital goods etc.

 

Also read: Procedures to exit EOU/EHTP/STP/BTP unit as per FTP

 

This post explains about the procedures and formalities to exit STP,EOU or EHTP unit. If you would like to add your views about exit of STP,EOU,EHTP or BTP, write below.

 

 

Share your thoughts about this post, Guidelines to close an EOU, EHTP or STP units.

 

The above information is a part of Export Import Online Tutorial

 

Who are authorized to issue Certificate of origin under Harvest Scheme (EHS)India Thailand FTA EarlyWho are authorized to issue COO under India South Korea Comprehensive Economic Partnership Agreement (CEPA)Authorities to issue Certificate of Origin under India Singapore Comprehensive Economic Cooperation Agreement (CECA)Who are authorized to issue COO under SAARC Preferential Trading Arrangement or SAPTA Preferential Trade AgreementAuthorities to issue Certificate of origin under India Sri Lanka Free Trade Agreement(ISLFTA)Offices to contact for Certificate of origin under India MERCOSUR Preferential Trade Agreement,   Office to contact for COO under India Malaysia Comprehensive Economic Cooperation Agreement,    Who are authorized to issue Certificate of origin under India Japan Comprehensive Economic Partnership AgreementHow to get Certificate of origin under India Chile Preferential Trade AgreementAuthorized agencies to issue Certificate of origin under India ASEAN Trade in Goods AgreementAuthorized offices to issue COO under India Afghanistan Preferential Trade AgreementWho are authorized to issue Certificate of origin under Global System of Trade Preferences (G S T P)Authorized agencies to issue Certificate of Origin under Asia Pacific Trade Agreement (APTA)Who are authorized to issue Certificate of origin under Generalized System of Preferences (GSP) Scheme?Authorized agencies to issue Certificate of origin under SAFTAGSP, a brief guide to exportersHow to get non preferential Certificate of Origin, state wiseState wise address to obtain COO non preferentialList of All India Agencies to issue COO non preferential, LIST OF AGENCIES AUTHORISED TO ISSUE CERTIFICATES OF ORIGIN- NON PREFERENTIAL ALL INDIA ORGANISATIONS

 

 

Posts about Export Import Online Training;

Types of export containers
Measurement of export containers
Foreign Trade Policy of India 2015-20
MEIS, Merchandise Exports from India Scheme
SEIS, Service Exports from India Scheme
Merge your Commercial Invoice and Packing List for all your future exports
Export procedures and documentation
How to export your product?
How to import your product?
Click here to know HS code of your product
What is the ITC code (Indian Tariff Code) of your product?
12 Major risks and solutions in Imports and Exports
Bank Pre shipment Finance to exporters
How to import Electrical machinery equip, Sound Recorders, TV Recorders
Procedure to import Miscellaneous Articles Of Base Metal
How to make DA mode of payment safe
How to make delay in delivery of Shipment?
How to minimize import cargo clearance time? An open logic proposal to WTO
Is Airway bill a documents of title?
Who can inspect import cargo in US
Who decides shipping carrier on FOB shipments
How does a Running bond work?
Why to insure export goods?
What is Nominated cargo or Routing order shipment
What is NVOCC? How NVOCC can provide better rate than the main shipping carriers
What is packing credit in export business?
What is Shipper Load, stow and count in Bill of Lading
What is swift transfer in import and export trade.


Comments


Nazim Idrees: In regard to the process of Exit from EOU Scheme. What if the exit process take more than 6 months and may be go beyond 1 year, can the EOU apply for any Advance Authorisation and start importing raw material and also export till the process of EOU is completed ? If so kindly provide the details if any in this regard because the Customs / Central Excise Authorities will stop issuing Procurement Certificates once you apply for exit from EOU and will not issue PC's till the process is completed.

Discussion Forum

You can also share your thoughts about this article.
Any one can answer on question posted by Readers