New Delhi, Mar 26 (KNN) The Ministry of Commerce has extended the exemption from Integrated Goods & Services Tax (IGST) and Compensation Cess under the Export Oriented Unit (EOU) Scheme till October 1, 2018.

In a notification, Directorate General of Foreign Trade (DGFT) said, “Exemption from Integrated Tax and Compensation Cess under EOU Scheme under Para 6.01 (d)(ii) of FTP 2015-20 is extended upto 01.10.2018.”

According to Para 6.01 (d) (ii) of FTP 2015-20, “The imports and/ or procurement from bonded warehouse in DTA or from international exhibition held in India shall be without payment of customs duty as provided under First Schedule to the Customs Tariff Act, 1975 and additional duty of Customs leviable under Section 3(1), 3(3) and 3(5) and without payment of Integrated Tax and GST Compensation Cess leviable under section 3(7) and 3(9) of the Customs Tariff Act, 1975 as per notification issued by the Department of Revenue.”

The purpose of the EOU scheme is basically to boost exports by creating additional production capacity.

Under this scheme, the units undertaking to export their entire production of goods are allowed to be set up. These units may be engaged in the manufacture, services, development of software, trading, 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).

Under the EOU scheme, the units are allowed to import or procure locally without payment of duty all types of goods including capital goods, raw materials, components, packing materials, consumables, spares and various other specified categories of equipments including material handling equipments, required for export production or in connection therewith. (KNN Bureau)