The commerce ministry has relaxed certain norms to promote outbound shipments and manufactured products from export-oriented units (EoUs), software technology parks of India (STPIs) and electronic hardware technology parks (EHTPs).
The norm of mandatory warehousing requirement for EoUs and software and electronic hardware technology parks has been done away with.
The Directorate General of Foreign Trade (DGFT) has also eased rules for the existing EHTP and STP units to avail tax exemptions in the case of conversion or merger of EoU and vice versa.
In a notification, the department said an EoU, which is into agriculture, aquaculture, horticulture and poultry, might be permitted to remove specified goods in connection with its activities for use “outside the premises of the unit”.
Earlier, it was allowed only for outside the bonded area. DGFT has said this in a notification, amending the foreign trade policy (2015-20).
The EoU scheme, which was introduced in December 1980, had allowed manufacturing units in export processing zones to enjoy 100 per cent tax exemption on profits from overseas sale and duty-free import of raw material.
As the scheme had a sunset clause, the tax benefits were stopped from March 2010. This scheme was utilised by small and medium enterprises to set up their units for the purpose of exports.
Later, a committee had suggested steps, including tax incentives, to revive these units.
The decision takes on significance as the country’s exports, after rising for the first time in 19 months in June, shrank again in July. It contracted 6.84 per cent due to the decline in shipments of engineering goods and petroleum products.
