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SEZ unit has to be located within the specified zones developed, while EOU unit can be set up at any of over 300 places all over India
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The unit can import capital goods, raw materials, consumables, packing material, spares etc. without payment of customs duty. Similarly, these can be procured indigenously without payment of excise duty. Second hand capital goods can also be imported
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They have to achieve positive NFE (Net Foreign Exchange Earnings)
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Minimum investment in plant and machinery and building is Rs 100 lakhs for EOU. This should be before commencement of commercial production. There is no such limit for SEZ
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A bond in prescribed form has to be executed. There is no physical supervision of customs / excise authorities over production and clearances, but prescribed records are required to be maintained
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Fast Track Clearance Scheme (FTCS) for clearances of imported consignments for EOU. In case of SEZ units, customs clearance for export and import is obtained within the zone itself
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Generally, all final production should be exported, except rejects upto prescribed limit
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Sale within India should be on payment of excise duty. The duty which will be equal to normal customs duty which would be payable on such goods, if imported. However, in certain cases, excise duty payable will be only 50% / 30% of normal customs duty payable on such goods if imported into India
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Sub-contracting of production outside on job work basis is permissible after obtaining necessary permission on annual basis
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Job work for exports is permitted
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Samples can be sold / given free within prescribed limit
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Unutilised raw material can be disposed of on payment of applicable duties
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The unit can exit (de-bond) with permission of Development Commissioner, on payment of applicable duties
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Central Sales Tax (CST) paid on purchases is refundable (but not local tax). [In case of SEZ unit, supplier does not have to pay CST]
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Prescribed percentage of foreign exchange earnings can be retained in EEFC account in foreign exchange
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100% foreign equity is permissible, except in a few cases
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Supplies made to EOU by Indian supplier are ‘deemed exports’ and supplier is entitled to benefits of ‘deemed export’. Supplies to SEZ are ‘exports’ and all export benefits are available
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Restrictions under Companies Act on managerial remuneration are not applicable
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