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Comparision of EOUs and SEZ on Factors Establishment Import Procedures with Green Channel Custom Clearance.


Export Oriented Units vs. SEZ


The Export Oriented Units (EOUs) scheme introduced in early 1981 is complementary to the SEZ scheme. It adopts the same production regime but offers a wide option in locations with reference to factors like source of raw materials, ports of export, hinterland facilities, availability of technological skills, existence of an industrial base and the need for a larger area of land for the project. 1764 units are in operation under the EOU scheme as on March, 2004.

Factors Export Oriented Units (EOU) Special Economic Zone (SEZ)
Establishment
Import Procedures The unit can import capital goods, raw materials, consumables, packing material, spares etc. without payment of customs duty. Similarly, these can be procured indigenously without payment of excise duty. Second hand capital goods can also be imported.
Minimum investment in plant and
machinery and building is Rs 100 lakhs for EOU. This should be before commencement of commercial production.
There is no such limit for SEZ.
Procedure
Green Channel There is no physical supervision of
customs / excise authorities over
production and clearances, but prescribed records are required to be maintained.
There is no physical supervision of customs /
excise authorities over production and
clearances, but prescribed records are
required to be maintained.
Custom Clearance Fast Track Clearance Scheme (FTCS) for clearances of imported consignments for EOU. In case of SEZ units, customs clearance for export and import is obtained within the zone itself.
Export of final production Generally, all final production should be exported, except rejects upto prescribed limit. Generally, all final production should be exported, except rejects upto prescribed limit.
Central Sales Tax (CST) Central Sales Tax (CST) paid on purchases is refundable (but not local tax). In case of SEZ unit, supplier does not have to pay CST
Supplies made by Indian Suppliers Infrastructure Supplies made to EOU by Indian supplier are ‘deemed exports’ and supplier is entitled to benefits of ‘deemed export’. Supplies to SEZ are ‘exports’ and all export benefits are available.
Infrastructure General infrastructure available to EOU unit are not as better as available to SEZ units General infrastructure available to SEZ unit are much better as available to SEZ units

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