Promotion Council for EOUs & SEZ Units
(Ministry of Commerce and Industry,
Govt. of India)
Bhikaiji Cama Bhawan, Bhikaiji Cama Place, New Delhi-110066
Tel : 011-26167042/ 26165805/26166185 Fax : 011-26165538
Email : firstname.lastname@example.org
CIRCULAR NO. 43 DATED 19.4.04
i. Meeting held with Shri Arun Jaitley, Honourable Commerce
& Industry Minister on Friday, April 16, 2004.
Meeting held with Shri Dipak Chatterjee, Commerce Secretary
April 15, 2004.
Meetings held with Shri A.K. Singh, Chairman, CBEC and
Shri Sidharth Kak, Member (Customs) on Thursday, April
EPCES Meeting with Press held on Friday, April 16, 2004.
Farewell Dinner for Shri Vinay Bansal, Additional Secretary,
and Welcome Dinner for Shri G.K. Pillai, Additional Secretary,
Ministry of Commerce held on Friday, April 16, 2004.
A delegation comprising Shri Sharad Jaipuria, Chairman,
EPCES, myself, Shri R.K. Sonthalia, Member, Central Governing
Council, Shri Vishwa Nath, Regional Chairman, EPCES, Noida
Special Economic Zone, Shri Baldev Singh, Jt.Development
Commissioner, SEEPZ Special Economic Zone called on Chairman,
CBEC & Member (Customs) on Thursday, April 15, 2004.
Delegation discussed in detail issues/problems being faced
by EOUs/SEZ Units. A list of issues, in respect of which
detailed representation was submitted to Department of Revenue,
is enclosed for your ready reference.
EPCES delegation met Shri Arun Jaitley, Honourable Commerce
& Industry Minister on Friday, April 16, 2004 and Shri
Dipak Chatterjee, Commerce Secretary on Thursday, April
15, 2004. A list of issues, in respect of which detailed
representation was submitted, is enclosed along with for
EPCES organized Farewell Dinner for Shri Vinay Bansal, Additional
Secretary, Ministry of Commerce and Chairman, Board of Approvals,
who after promotion to the Secretary, Government of India
has joined as Chairman, National Pharmaceutical Pricing
Authority. EPCES also invited Shri G.K. Pillai, who has
joined as Additional Secretary, Ministry of Commerce in
place of Shri Vinay Bansal and welcomed Shri G.K. Pillai,
Additional Secretary, Ministry of Commerce. EPCES had invited
Shri S. Kak, Member (Customs) as well but because of pre-occupation
he could not come. Shri Jayant Dasgupta, Joint Secretary,
Ministry of Commerce, Shri A.K. Prasad, Director (Customs),
Shri Ashok Kumar Meena, Deputy Secretary, Ministry of Commerce,
Shri Mohan Pyare, Jt.Development Commissioner, Noida Special
Economic Zone were also present on the occasion.
EPCES organized a Press Meet with leading newspapers on
Friday, April 16, 2004 to highlight issues relating to EOUs/SEZ
Units. In this Press Meet the representatives of following
newspapers were present:
Hindu Business Line.
Press Trust of India.
United News of India.
Navbharat Times (Hindi).
World Trade Scanner.
Some of the clippings of the Press are also enclosed for
This is for your information please.
of issues, in respect of which detailed representation was
submitted to Department of Revenue.
Removal of Service Tax on supplies to EOUs
Issues relating to Central Sales Tax Act
Exemption from the requirement of bank guarantee/security
with B-17 Bond for import as well as for sub-contracting
Fast Track clearance/recognizing golden EOUs/SEZ Units
Availability of DEPB for supplies from DTA to SEZ units
Repeated registration with different ports and delay in
registration with Customs Authorities.
Rationalization of duty structure on domestic sales by
Abolition of cost recovery charges
Cenvat Credit facility to SEZs/EOUs.
Self Removal Process (SRP)
Payment of Excise Duty on monthly basis.
AED on High Speed Diesel
Duty on heavy furnace oil sludge
Permission to supply against CT-2/Annexure I
DTA sale of fabrics by EOUs Rate of duty
Depreciation on Capital Goods
Procedure for granting permission for procurement of HSD
Clearance of samples by EOUs to DTA
DTA Sale of products manufactured by EOUs where excise
duty is NIL
Negligible use of imported consumables.
Duty on statutory samples cleared from EOU.
of issues, in respect of which detailed representation was
submitted to Honble Commerce Minister.
SUGGESTIONS RELATING TO EOUs
Continuation of EOU Scheme beyond 2010
Exemption from CST for supplies from DTA to EOUs
Exemption from Service Tax for supplies to EOUs
DEPB benefits for supplies of goods from DTA to EOUs
DTA Sale on the basis of duty foregone on imported Inputs
plus Excise Duty on finished goods.
II. SUGGESTIONS RELATING TO SEZ UNITS
6. Availability of DEPB for supplies from DTA to SEZ
Supplies by SEZ to DTA against free foreign exchange
be counted for discharge of export performance.
DTA Sale from SEZ on the basis of duty foregone On imported
inputs plus Excise Duty on the finished Product
III. SUGGESTIONS RELATING TO CBDT
9. Doing away with the Sunset clause of 2010 under Section
10B of the Income Tax Act for EOUs.
Income Tax exemption for DTA units converted into EOUs
Income Tax exemption under Section 10A to existingSEZ
units for a period of 10 years from the date of Conversion
of EPZs into SEZs.
Income Tax exemption to Trading Units in SEZs under Section
10A of Income Tax Act.
SUGGESTIONS RELATING TO CBEC
13. Exemption from Bank Guarantee
Dispensing with Cost Recovery Charges
Fast Track clearance for recognized EOUs/SEZ Units
16. Repeated registration with different ports and delay
in Registration with Customs Authorities.
V. SUGGESTIONS RELATING TO BANKING
17. Availability of PCFC on priority
Extension of OBU facility to EOUs
The Hindu - Business Line Monday, April 19, 2004
EOUs, SEZ units want benefits restored
Delhi , April 18
trade policy liberalisation and phased reduction in the
country's tariff structure over the years together have
robbed the 100-per cent export-oriented units (EOUs) and
units located in the Special Economic Zones (SEZs) of their
very rationale, depriving them of any preliminary advantage
they had in this regard.
a news conference here, the newly-formed Export Promotion
Council for EOUs and SEZs (EPCES) Chairman, Mr Sharad Jaipuria,
said a delegation led by him has called on the Union Commerce
and Industry Minister, Mr Arun Jaitley, Member (Customs)
Central Board of Excise and Customs, Mr S. Kak, and the
Commerce Secretary, Mr Dipak Chatterjee, and presented a
charter of demands so as to restore reasonable benefits
already conferred on them.
Jaipuria said exports from EOU/SEZ units are being hit badly
due to appreciation of rupee and decline in forward premium
on dollar. In the last one year, the rupee has appreciated
roughly 10 per cent against the dollar. Similarly, the one-year
premium of dollar, which was hovering between 5 and 6 per
cent, has come down to zero. Hence the cumulative loss to
the EOU/SEZ units is 14-15 per cent. He said against the
exports of Rs 40,000 crore, the loss to SEZ/EOU sector is
approximately Rs 6,000 crore which the industry is unable
to absorb, blunting the competitiveness of this sector.
exports from EOU/SEZ are all set to go up from Rs 32,785
crore in 2002-03 to over Rs 40,000 crore in 2003-04, Mr
Jaipuria deplored the units in this sector have not been
obtaining pre-shipment credit in foreign exchange from various
banks, despite earning high foreign exchange.
Jaipuria said that when a domestic tariff area unit is converted
into EOU, then such units must continue to get the benefit
of income tax exemption. He said that though trading activity
has been allowed in the SEZ, such units engaged in trading
are not entitled to income tax exemption. He said that if
India is to become a hub of international trading as well,
this facility should be extended to EOU/SEZ units.
the 2,300 operational EOUs and SEZ units, EPCES had enrolled
over 1,500 EOUs/SEZ units including units with export turnover
ranging from Rs100 crore to Rs 1,000 crore a year, Mr Jaipuria
said. He said Golden EOUs/SEZ units should be recognised
on certain criteria such as investment and performance and
given some benefits such as exemption from procurement certificate,
exemption from bank guarantee/security, clearance of goods
from customs/excise on self-declaration basis. He said a
detailed scheme has already been sent from the Ministry
of Commerce to Finance for early action, he added.
this sector has shown an average growth of 30 per cent in
the last decade, the Council is looking ahead to achieve
exports of $20 billion by 2010 and $80 billion by 2020.
He said the Council has plans to organise overseas activities
by taking trade delegation from among its members to Latin
America, Africa, CIS and South East Asia in 2004-05, keeping
in view the multi-product interests of its members. The
Council also proposes to host seminars/workshops one each
in seven SEZs on export-related subjects this year.
L.B. Singhal, Director-General of the EPCES, said unlike
other product-specific Councils for export promotion, it
is the first and unique scheme-specific export promotion
council for serving the interests of exclusive exporting
community. He said there is no justification for asking
bank guarantee from EOUs as they operate in customs bonded
a domestic exporter with a turnover of Rs 1 crore and above
is not required to give any bank guarantee, under the EOU
scheme, even units such as Moser Baer India Ltd, Dr Reddy's
Lab, Hindustan Lever which are doing exports of more than
Rs 500 crore individually are required to furnish bank guarantee
to the customs along with B-17 Bond, before effecting any
Singhal said that EOU/SEZ units could take advantage of
the market development assistance (MDA) scheme, since as
per revised MDA guidelines effective from April 1, 2004,
MDA is permissible to exporter with a free-on-board value
of exports upto Rs 5 crore in the preceding year.
Monday, April 19, 2004
Seeks Sops To Reach $20 Bn Exports
DELHI, APRIL 18: Aiming to achieve $20 billion exports by
2010 from export oriented units (EoUs) and special economic
zones (SEZ) -- the apex Export Promotion Council of EoUs
and SEZ (EPCES) -- has asked the government for discontinuation
of sunset clause of 2010, availability of pre-shipment credit
in forex and controlling appreciation of the rupee against
new EoUs will come up because of the sunset clause of 2010
as the period of six years is a very short period for setting
up units, starting operations and then recovering investments,"
Sharad Jaipuria, the newly elected chairman of EPC for EoUs
and SEZ units said.
Jaipuria has also sought income tax exemption for domestic
tarrif area units converting to EoUs and also for trading
activity in SEZs.
concern over the non-availability of pre-shipment credit
in forex to EoUs and SEZs, he said though the sector was
responsible for earning forex up to $6.8 billion during
2002-03, the units were not able to get pre-shipment credit
in forex from banks.
over the impact of the rising rupee against the dollar,
Mr Jaipuria in his first interaction with media on Friday
sought immediate intervention by the Reserve Bank of India.
He said the rupee appreciation by nearly 10 per cent in
a years time had eroded exporters competitiveness
in global markets resulting in loss of business for them.
Mr Jaipuria said that the sector, which currently had investment
of about Rs 20,000 crore had witnessed a growth rate of
nearly 46 per cent in 2003-04.