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 : email@example.com
CIRCULAR NO. 51 DATED 28-6-04
: Meeting with Shri Kamal Nath, Hon'ble Commerce & Industry
Minister on EXIM Policy and Budget related issues and submission
of presentation to Shri P. Chidambaram, Hon'ble Finance
Sharad Jaipuria, Chairman of EPCES and myself had a meeting
with Shri Kamal Nath, Hon'ble Commerce & Industry Minister
on June 24, 2004. In this meeting Shri Dipak Chatterjee,
Secretary, Ministry of Commerce, Shri G. K. Pillai, Additional
Secretary and DGFT, Ministry of Commerce, Smt. Seema Bahuguna,
Additional DGFT and other senior officers of the Ministry
of Commerce were present. In this meeting a detailed discussion
was held on all issues relating to EOUs and SEZ Units. It
was emphasized that EOUs and SEZ Units are basically operating
within the same parameters and they should be extended the
same benefits. It was also emphasized that sunset clause
under Section10B of the Income Tax Act upto 2009 should
be removed and benefit of CST and Service Tax exemption
should be extended to EOUs. In respect of SEZ, early enactment
of SEZ Act, was emphasized for bringing out the stability
in the regime.
issues covered in the discussions were as follows:-
ISSUES RELATING TO EOUs
Merger of EOU Scheme with SEZ Scheme and renaming "EOUs"
as "Virtual SEZ Units"
Permission for import of duty free raw material for setting
up of EOU
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
Sale in Domestic market on the basis of duty foregone on
Duty free import of natural rubber through all gateway ports
ISSUES RELATING TO SEZs
Enactment of SEZ Act and Rules
Availability of DEPB for supplies from DTA to SEZ Units
for supplies affected from 1-4-03
Supplies by SEZ to DTA against free foreign exchange to
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.
Payment in Indian Rupees for supplies made by DTA to SEZ
Subsidy for supplies of rubber latex to SEZ units
Indian SEZ Units should be allowed to tap the domestic market
without any restrictions.
Suggestions relating to Gems & Jewellery Units in SEZs
Restriction in removal of unusable diamonds from SEZ to
Removal of broken diamonds to DTA.
Allowing diamond imprest licence holders in DTA to source
cut and polished diamonds from DTA in lieu of direct imports
Restriction in removal of cut and polished diamonds to DTA
for purposes of sub-contracting of production or production
ISSUES RELATING TO CBDT
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.
18. Income Tax exemption under Section 10A to existing SEZ
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.
Definition of Manufacturing
D) ISSUES RELATING TO CBEC
Exemption from Bank Guarantee
Dispensing with Cost Recovery Charges
Recognition of Golden EOUs
Repeated registration with different ports and delay in
registration with Customs Authorities
Time Frame for various activities by the field formation.
ISSUES RELATING TO BANKING
Availability of PCFC on priority
Extension of OBU facility to EOUs on terms equivalent to
Stamp duty under Indian Stamp Act 1899
Automatic Gold Card Scheme for EOUs/SEZ Units
Restructuring of Term Loan for EOUs/SEZ Units
F) OTHER ISSUES
Availability of Power to EOUs
State Government levies
Hon'ble Commerce Minister assured that attempts would be
made to resolve all pending issues relating to EOUs and
SEZ units and he will take up the issues with Central Board
of Direct Taxes (CBDT), Central Board of Excise & Customs
(CBEC) and Department of Banking.
am enclosing copy of press coverage of Economic Times, Financial
Express, Indian Express and Hindu Business Line. This is
also been covered by other newspapers namely The Statesman,
Hindustan (Hindi), Navbharat Times (Hindi).
would like to inform you that after taking over as Commerce
& Industry Minister, this was the third meeting which
the Council had with the Commerce & Industry Minister.
Shri Sharad Jaipuria and myself had met Shri Kamal Nath,
Honourable Commerce & Industry Minister on 28-5-04 then
an Open House was held with Hon'ble Commerce & Industry
Minister on 5-6-04 in Delhi and this was the third interaction
have also sent a detailed presentation to Shri P. Chidambaram,
Honourable Finance Minister on the Budget related issues
specifically all the issues relating to Section 10A and
Section 10B of the Income Tax Act. This is for your information
ECONOMIC TIMES - JUNE 26, 2004
to take up pending export issues
DELHI: Union commerce and industry minister Mr Kamal Nath
has said he would soon take up with the finance minister
"all pending export-related issues", which could
not be resolved in the last couple of years.
During a meeting with representatives of the export promotion
council for export-oriented units (EOUs) and special economic
zones (SEZ) units here yesterday, Mr Nath said these issues
would be resolved with the intervention of Central Board
of Direct Taxes, Central Board of Excise and Customs and
the department of banking.
Nath told exporters in the thrust sectors such as gems and
jewellery to come up with time-bound marketing plans in
order to achieve quantum jump in exports from sectors in
which India has a distinct comparative advantage. According
to an official release, the minister said he would extend
all support to such promotional plans to tap overseas markets
more effectively and urged the exporters to have a futuristic
vision with a long-term perspective so as to leverage their
strengths as world leaders in this important segment.
gems and jewellery sector is among India's leading foreign
exchange earners and exports from this sector in 2003-04
were valued at $12 billion, with USA and Canada alone accounting
for a 40% share. As to the future, the gems and jewellery
export promotion council has indicated to the minister a
target of $16 billion by 2007.
asked exporters of gems and jewellery to strive for achieving
$20 billion by 2007 and welcomed the plans to transform
India from the largest diamond manufacturing centre (ie,
cut and polished diamonds) to the world's largest trading
centre for gems and jewellery.
sector envisages additional 5,00,000 employment by 2007
(present workforce is one million) and creation of SEZs
across the nation exclusively for Indian gems and jewellery,
of which the Manikanchan Park (SEZ) at Kolkata is already
operational. The minister also had a meeting with the council
for leather exporters yesterday.
FINANCIAL EXPRESS - JUNE
To Take Up Pending Export Issues With FM
DELHI, JUNE 25: Commerce and industry minister Kamal Nath
has asked export-oriented units (EOUs) and special economic
zones (SEZs) to list out pending issues which need to be
taken up with the finance ministry in the run-up to the
a pre-Budget and pre-Exim (export-import) policy meeting
with the export promotion council for EOUs and SEZ units
(EPCES) on Friday, the minister said that he would discuss
with the finance minister all pending export-related issues
which could not be taken up in the last couple of years.
These include issues before the Central Board of Direct
Taxes (CBDT), the Central Board of Excise & Customs
(CBEC) and banking.
chairman Sharad Jaipuria requested Mr Kamal Nath to do away
with the sunset clause of 2010 under Section 10B of the
Income Tax Act for EOUs. As per the existing provisions,
income tax exemption is only available till financial year
2009. "This is acting as a deterrent for investment
in this sector. The sunset law should be immediately removed
if investments are to be attracted in the sector,"
also stressed that domestic tariff area (DTA) sale from
EOUs should be allowed based on the principal of duty foregone
on imported inputs. "This principal is perfectly WTO
compatible and this practice is being adopted world wide,"
Mr Jaipuria said.
exports from EOUs and SEZs from India during the last fiscal
amounted to Rs 41,368 crore ($9.19 billion) with EOUs recording
a growth of 20 percent and SEZs a growth of 40 per cent
over the previous fiscal.
THE HINDU BUSINESS LINE - 27-6-04
body presents pre-budget wishlist
DELEGATION led by the Chairman of the Export Promotion Council
for Export-Oriented Units and Special Economic Zone (EPCES)
met the Union Commerce & Industry Minister, Mr Kamal
Nath, to present pre-Budget and pre-Exim Policy memorandum,
demanding policy support for the balanced growth of the
their memorandum, the Chairman, EPCES, Mr Sharad Jaipuria,
pleaded to do away with Sunset Clause of 2010 under Section
10B of the Income Tax Act for EOUs, since as per the extant
provisions, income-tax exemption is available only until
financial year 2009.
also noted that domestic tariff area (DTA) sale from EOUs
should be allowed based on the norm of duty foregone on
imported inputs. Duty foregone could be arrived at on the
basis of standard input-output norms on self-declaration
basis, he said adding that EOU and SEZ units should be freely
allowed to purchase power from Central Government agencies
like NTPC at competitive rates without additional cost of
wheeling charges and cross subsidy.
Director-General, EPCES, Mr L.B. Singhal, demanded fast-track
clearance for EOUs so that established units could focus
on their exports without any hindrance. Timeframe needs
to be prescribed for every activity, which is being performed,
by customs and central excise field formations The Indian
Express - New Delhi - 26-6-2004
ask for tax break beyond 2010 NEW DELHI : Special Economic
Zones (SEZ) and Export Oriented Units have asked for an
income tax break beyond the 2010 deadline, assuring exports
worth Rs. 50,000 crore this year and US$ 50 bn by 2010 provided
a host of sops are granted. In a meeting with Commerce and
Industry Minister Kamal Nath, the Export Promotion Council
for EOUs & SEZ chairman Sharad Jaipuria said the IT
holiday beyond financial year 2008-09 was essential for
the small scale industry's growth.