The Foreign Trade Policy has allowed export-oriented units (EoUs) to procure finished goods for consolidation along with their manufactured goods, subject to certain safeguards. Initially, only manufacturing activity was permitted in the EoUs and not procurement or trading.
Moreover, the EoUs will now be allowed the Cenvat (central value added tax) credit facility for the component of SAD (special additional duty) and education cess on DTA (domestic tariff area) sale. “EoUs selling goods in the domestic market have been paying the Cenvat, education cess and 4 per cent SAD and the domestic buyer wasn’t getting the credit facility on the SAD and education cess. So, now the Department of Revenue will assess the situation and then the buyer will be benefitted,” explained L B Singhal, director general, Export Promotion Council for EoUs and SEZs.
EoUs have also been allowed to sell products manufactured by them in DTA up to a limit of 90 per cent, instead of the existing 75 per cent. The policy also says that during the current downturn, Board of Approvals (BoAs) will consider extension of the block period by one year for calculating the net foreign exchange earnings of EoUs.
Content Guide
The Foreign Trade Policy has allowed export-oriented units (EoUs) to procure finished goods for consolidation along with their manufactured goods, subject to certain safeguards. Initially, only manufacturing activity was permitted in the EoUs and not procurement or trading.
