Boost Exports and Navigate EOU Scheme Compliance with Ease
Expanding your export operations? The Export Oriented Unit (EOU) scheme is one of India’s most reliable policy frameworks to do just that, if navigated right. The Export Oriented Unit (EOU) scheme is one of India’s most reliable ways to scale your exports, if you get it right from the start.
At SOFTEX Consultancy Services LLP, we work closely with businesses to help them understand and make the most of the scheme. With over two decades in the field and 5,000+ successful registrations, we know exactly how to navigate the EOU process. As your trusted EOU consultant, we ensure every step is smooth.
The EOU scheme was introduced in the year 1980 vide Ministry of Commerce resolution dated 31 st December 1980. The purpose of the scheme was to boost exports by creating additional production capacity.
The EOU scheme is, at present, governed by the provisions of Export and Import Policy of Govt. Of India. These units may be engaged in the manufacture, services, development of software, repair, remaking, reconditioning, re-engineering including making of gold/silver/platinum Jewellery and articles thereof, agriculture including agro-processing, aquaculture, animal husbandry, bio-technology, floriculture, horticulture, pisciculture, viticulture, poultry, sericulture and granites. The EOUs can export all products except prohibited items of exports in ITC (HS).
Key Benefits and Features of EOU Scheme
The EOU scheme offers a host of EOU benefits and incentives that can make export operations more efficient, cost-effective, and growth-friendly.
- All the imports to units are customs duty free.
- Refund of GST for the procurement of Capital Goods and Raw Materials from the domestic market.
- Units are entitled to sell the product in the local market up to 50% of the products exported in value terms.
- Full Freedom for sub-contracting.
- They have to achieve positive NFE (Net Foreign Exchange Earnings).
- Minimum investment in plant and machinery and building is Rs.100 lakhs for EOU. This should be before commencement of commercial production.
- Generally, all final production should be exported, except rejects up to prescribed limit.
- Samples can be sold / given free within prescribed limit.
- Unutilised raw material can be disposed of on payment of applicable duties.
- The unit can exit (de-bond) with permission of the Development Commissioner, on payment of applicable duties.
- Prescribed percentage of foreign exchange earnings can be retained in EEFC accounts in foreign exchange.
- No restrictions on External Commercial Borrowings.
Frequently Asked Questions
1. Who can register under the EOU scheme?
Any business engaged in manufacturing, software development, services, or agriculture-related sectors can apply if they meet the eligibility norms.
2. What is the minimum investment required for setting up an EOU?
You need to invest a minimum of ₹100 lakhs in plant, machinery, and building before starting commercial operations.
3. Can EOUs sell in the domestic market?
Yes, up to 50% of the export value in any financial year can be sold in the DTA (Domestic Tariff Area) with applicable duties.
4. Are EOUs exempt from GST and customs duties?
Yes. EOUs get customs duty exemption on imports and refund of GST on domestic procurement of capital goods and raw materials.
5. Can an EOU exit the scheme later?
Yes, with approval from the Development Commissioner and after paying the applicable duties, a unit can exit the scheme.