For setting up a unit in an EOU, three copies of the application form as mentioned in the Appendix-14I-A of the Handbook (Vol.1) are required to submit to the Development Commissioner (DC) of the concerned EOU along with 3 copies of Project Report and a Demand Draft for Rs.5,000/- drawn in favour of Pay & Accounts Officer, Ministry of Commerce, Central Bank of India, Udyog Bhavan payable at New Delhi. The application shall be accompanied by:
- Project Report
- Income Tax Returns of the promoters
- Identity proof of the promoters
Also, the application is need to be signed by owner in case of an independent firm or by the partners in case of partnership firm. A copy of the memorandum and Articles of Association has to be filed with the application.
Proposals for setting up units in EOU which do not require industrial licence may be granted approval by the Unit Approval Committee under the chairmanship of the Development Commissioner within 15 days.
Proposals for setting up units in EOU requiring Industrial Licence may be granted approval by the Development Commissioner after clearance of the proposal by the EOU Board of Approval and Department of Industrial Policy and Promotion within 45 days.
Letter of permission (LOP) and Letter of Intent (LOI) issued to EOU units by the Development Commissioner would be construed as a licence for all purposes, including for procurement of raw material and consumables either directly or through canalising agency.
The LOP/LOI shall specify the items of manufacture/service activity, annual capacity, projected annual export for the first years in dollar terms, Net Foreign Exchange Earnings (NFE), limitations, if any, regarding sale of finished goods, by products and rejects in the DTA and such other matter as may be necessary and also impose such conditions as may be required.
Letter of Permission (LOP) shall specify
- Items of manufacture/service activity.
- Annual capacity
- Projected annual export for the first five years in dollar terms.
- Net Foreign Exchange Earnings
- Limitations, if any regarding the sale of finished goods, by products and rejects in the DTA.
- Such other matter as may be necessary.
- Conditions as may be required
- Legal undertaking in Appendix 14 1F
- Permanent email address and digital signature on the said email id. In case of an EOU not having a permanent email id and digital signature, further imports and DTA sale shall not be permitted by the Development Commissioner.
LOP must have an initial validity of 3 years by which time the unit should have commenced production. Once the unit commences production, LoP / LoA issued is valid for a period of 5-years for its activities.
Application procedure of EOU on a leased land
EOU may be approved on leased land provided the lease has been obtained from the Government Dept/undertaking/agency. In case of lease obtained from private parties, LOP shall have a validity period of 5 years from the date of LUT( Letter of Undertaking) and the Development Officer shall satisfy himself as to the genuine nature of the lease.
On completion of the period of approval, the unit shall apply for renewal if it opts to continue within a period of 6 months to the Development Commissioner. If no intimation in this regard is received, the DC will cancel the approval and take further action.
Legal undertaking
After receiving the LOP, the unit has to execute an undertaking in prescribed form Appendix 14-1F to abide by the terms and conditions of the LOP. The undertaking has a schedule which lays down list of duty free goods which are to be imported or procured from local market.