The government has introduced cent percent Export Oriented Units Scheme from 31st December, 1980 in order to have local advantages in production and all facilities of a FTZ. This 100% export oriented units (EOUs) scheme is in operation since 1981. It is compulsory to the EZP schemes. It adopts the same production regime but offers a wider source of raw materials, ports of exports, hinterland facilities, availability of technological skills, existence of an individual base and the need for a larger area of land.
Benefits of 100% EOUs:
- The EOUs are mainly concentrated in the engineering, chemicals, plastics, granites and food processing.
- Such units are permitted to import raw materials, spare parts, machinery, etc., without the payment of import duty.
- They need not pay excise duty when they use the domestic raw materials, etc., for the production of goods which are to be exported.
- 100% EOUs need not be located in the FTZs. Such units may be located at any place and may be of any size.
- They are given special concessions such as five year tax holiday, two years gestation period before exporting.
- They export practically the entire or atleast 75% of their total production abroad and help the country is promoting exports.
The government policy is for encouraging such units to export more. As on 31st March, 1990, 176 units had commenced production and achieved exports worth about Rs. 1,907 crore. These units can sell upto 25% of their production in domestic tariff area, after paying appropriate duties. However, such units are supposed to produce and export their production (75%) for a period of 10 years .
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