Export Oriented Units (EOUs), Export Processing Zones. (EPZs), Electronic Hardware Technology Parks (EHTPs), and Software Technology Parks (STPs) As in the past, the 2002–2007 EXIM Policy allows units that undertake ‘to export their entire production of goods and services' to be set up under the EOU, EPZ, EHTP, or STP schemes. Such units could be engaged in ‘manufacture, services, repair, remaking, services, repair, remaking, reconditioning, re-engineering including making of gold/silver/ platinum ¡ewellery and articles thereof, agriculture, animal husbandry, bio-technology, floriculture, horticulture, pisciculture, viticulture, poultry, sericulture, and granites'.32 The EOU/EPZ/EHTP/STP units are entitled to import, without payment of duty, all types of goods, including capital goods, required by them for carrying out the activities listed above. They are required to earn a minimum of Net Foreign Exchange as a percentage of Exports (NFEP) and also show a minimum of EP as specified in Appendix I of the Policy. The EP requirement is generally expressed in terms of a specified amount or a multiple of the CIF value of the imported capital goods whichever is higher. A feature of these schemes is that the units are entitled to buy their requirements of capital goods and other materials from the Domestic Tariff Area (DTA), free of internal taxes. The Central Excise Duty is reimbursed if the purchase is not already exempted and the Central Sales tax is reimbursed. The units (except those manufacturing goods such as motor cars, alcoholic beverages, etc.) are also allowed to sell their produce to the DTA, but such sales are sub¡ect to the payment of the full import duty as well as the fulfilment of minimum NFEP. Sales to the DTA are restricted to 50 per cent of the FOB value of exports (10 per cent in the case of gems and ¡ewellery units). Sale of re¡ects may be made up to 5 per cent of the FOB value of exports but is not sub¡ect to the achievement of the NFEP.33 The entire operations of EOU/EPZ/EHTP/STP units are conducted in customs bonded premises, unless specifically exempted from physical bonding. The initial period of bonding is five years, but extendable for further periods of five years at a time. At the time of each extension, the authorities determine the NFEP and EP to be achieved during the extended period. On debonding, the unit has to pay duties of customs and excise in force at the time of debonding. Depreciation norms are laid down for being applied for calculation of the payable duty at the time of deb...
