• How-to

You have planned your venture, decided upon the process and technology you will use, prepared your feasibility report, accounted for competition, catered to the import laws, and zoomed in on where you want to establish your unit. But trading activity is not allowed under the EOU Scheme. And an EOU must achieve only positive Net Foreign Exchange (NFE) over a period of five years.

All applications for an EOU are to be filed with the concerned Development Commissioner of the Special Economic Zone. The application form has to be submitted in triplicate. With it, you must include a project report with a write-up on the background of the promoters; this will help you establish your credentials and standing.

If your unit does not have an Import Export Code (IEC), you will need to apply for it (using the prescribed form) to the Zone Administra-tion. After submitting the application form, and if every thing is in order, a Letter of Permission (LOP) is issued by the Zone Administration two weeks after the promoter has been interviewed by the Approval Committee. You will then be required to execute a legal undertaking to abide by the terms and conditions of the LOP. Subsequently, a green card will be issued to the unit.

After you receive an approval from the Development Commissioner concerned, manufacturing and other activities have to be undertaken under the customs bond. For this, a formal application must be made to the jurisdictional Assistant Commissioner, the Deputy Commissioner of the Customs, or the Central Excise for the issuance of a Private Custom Bonded Warehouse License under section 58 and 65 of the Customs Act, 1962.

After checking the premises and relevant documents, the requisite licence under section 58 and 65 of the Customs Act will be issued by the Assistant Commissioner, the Deputy Commissioner Customs and the Central Excise on a priority basis. Also, a bond (the B-17 Bond) has to be executed; this covers activities like the import, procurement and movement of duty-free goods, as per relevant notification.

An EOU also has to take a Central Excise Manufacture code number from the Super-intendent, Central Excise, in order to sell in the domestic market. And before you finally go on-stream, you will need to acquire approvals for local wiring and the electrical plan, for industrial water supply, and from the pollution control board. You will also need to register your EOU under the State Government Sales Tax Act and the Central Sales Tax Act.

Sector Scan
An EOU can also be set up in the following sectors:
•  Agriculture
•  Animal Husbandry
•  Aquaculture
•  Floriculture
•  Horticulture
•  Pisciculture
•  Viticulture
•  Poultry
•  Sericulture

©Entrepreneur February 2010

Tags:
EOU, export, Export Oriented Unit, set up, startup