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Export Promotion Council for EOUs & SEZ Units
(Ministry of Commerce and Industry, Govt. of India)

705, Bhikaiji Cama Bhawan, Bhikaiji Cama Place, New Delhi-110066
Tel : 011-26167042/ 26165805/26166185 Fax : 011-26165538
Email : epces@vsnl.net

EPCES CIRCULAR NO.28 DATED 19.12.03

 

L.B. Singhal 
Director General   
    

A delegation comprising Mr. R. Veeramani, Chairman EPCES, Mr. Sharad Jaipuria, Vice Chairman, EPCES, Mr. L. B. Singhal, Director General, EPCES, Mr. R. K. Sonthalia, Working Committee Member, Mr. P. C. Nambiar, Working Committee Member and Mr. Shekhar Agarwal, Managing Director, Bhilwara Group, met Shri Mrs. Vineeta Rai, Secretary (Revenue), in North Block, Ministry of Finance, New Delhi. In the meeting following senior officials from CBEC and CBDT were present:-

1) Mrs. Vineeta Rai, Secretary (Revenue)
2) Mr. S. K. Bhardwaj, Member (Budget) - CBEC
3) Mr. P. R. V. Ramanan, Member (Customs) - CBEC
4) Mr. Akhilesh Ranjan, Joint Secretary (TPL2) - CBDT
5) Mr. D. P. Sengupta, Joint Secretary (TPL1) - CBDT
6) Mr. Gautam Ray, Joint Secretary (TRU) - CBEC

In the meeting following issues relating to CBDT were taken up:-

i) Section 10A of the Income Tax Act, 1961 to cover "Inter-unit Transfer" and "Re-export of surplus goods" by SEZ Units
ii) Income Tax benefits to be extended to the Trading Activities for SEZ
iii) Section 10A to be amended to provide benefit of Income Tax exemption to SEZs for 10 years instead of 5 years @ 100% and next 5 years @ 50%.
iv) Restoration of Income Tax benefits to old SEZ units
v) Removal of sunset clause of 2010 under Section 10B for EOUs.
vi) Income Tax exemption under Section 10B in case of conversion of existing DTA unit into 100% EOUs
vii) Exemption from withholding tax
viii) Exemption from Research & Development Cess
ix) Transfer pricing regulations (Section 92 of the Income Tax Act)
x) Netting of interest earned on deposits against interest paid on the loans
xi) Weighted deduction for investment in R&D
xii) Inclusion of Distribution Tax under the purview of double taxation avoidance agreements with USA
xiii) Incentives for reviving the sick export units
xiv) Removal of Service Tax for supply of goods from DTA to EOU
xv) Simplification of procedure for availing exemption for supplies to SEZ
xvi) Exemption from CST for supplies to EOUs


Following issues relating to Indirect Taxes were taken up :-

i) Exemption from the requirement of bank guarantee/security with B-17 Bond for import as well as for sub-contracting
ii) Fast Track Clearances/recognizing golden EOUs/SEZ Units
iii) Repeated registration with different ports and delay in registration with Customs authorities
iv) Removal of export samples in DTA to their marketing/merchandising offices
v) Online systems in customs and 24 hours clearance by customs
vi) Procurement Certificate
vii) Factory container stuffing
viii) Re-import of goods
ix) Return of surplus material from DTA units
x) Rationalisation of duty structure on domestic sales by EOUs/SEZ Units
xi) Abolition of Cost Recovery Charges
xii) Duty on DTA sale
xiii) Procurement of goods from DTA for setting up of unit
xiv) Self Removal Procedure (SRP)
xv) Clearance of imported/indigenously procured goods for repair/replacement etc
xvi) Refund of duties paid on purchase made by EOU
xvii) Payment of Excise Duty on monthly basis
xviii) Exemption of Additional Excise Duty (AED) on Tea
xix) AED on High Speed Diesel
xx) AED (T&TA) on EOUs
xxi) Duty on heavy furnace oil sludge
xxii) Permission to supply against CT-2/Annexure 1
xxiii) DTA Sale of fabrics by EOUs -Rate of duty
xxiv) Depreciation on capital goods
xxv) Procedure for granting permission for procurement of HSD
xxvi) Difficulties being faced by EOUs in regard to return of raw materials procured under CT-3 fund defective.
xxvii) Clearance of samples by EOUs to DTA
xxviii) DTA sale of products manufactured by EOUs where excise duty is NIL
xxix) Negligible use of imported consumables
xxx) Duty on statutory samples cleared from EOU
xxxi) Exemption of CVD to re-processed plastic material in SEZ and EOU in line with DTA
xxxii) CENVAT Credit facility to SEZ/EOUs

Secretary (Revenue) and other senior officials provided a very patient hearing to the delegation and appreciated the potential of export from EOUs and SEZ Sector. Secretary (Revenue) directed CBEC that procedural issues relating to CBEC could be resolved without waiting for the Budget. Other issues She has assured for examination in the Budget exercise.