Circular No. 67dated 14^th September 1998

I am directed to refer to Board's instructions issued from F. No. 305/ 147/93- FTT dated the 31st January, 1994 and Board's Circular No. 59/ 98-Cus dated the 12th August 1998 on the sub-contracting by EOU/ EPZ/ EHTP units (hereinafter to as the said units).

2.      On further requests from the Ministry of Commerce and the Trade, the Board has once again considered the issue of sub- contracting by the above said units.

3.      It has now been decided that henceforth the permission to EOU/ EPZ units for sub-contracting will be given by the Assistant Commissioner incharge of the Export Oriented Unit (operating under Notification No. 53/98-Cus dated the 3rd June, 1997 as amended by Notification No. 12/98-Cus. dated the 27th April, 1998). Further the EOU/ EPZ and EHTP units may be allowed to get a part of their production completed either from the DTA units or from other EOU/ EPZ/ EHTP units, provided raw material for the manufacture of such goods, whether imported or indigenous, shall first reach and be accounted for in the statutory records of the above side units. Subsequently, these raw materials may be sent to the job worker for production of the final products. Final products manufactured from such raw materials shall be brought back from job worker's premises to the unit for accounting. The units will ensure that the wastage generated during the said job work is also brought back from the job workers' premises.

4.      Further to utilise the idle capacity of the EOU/ EPZ units, it has also been decided that the EOU/ EPZ units in textile, ready-made garments, agro-processing and granite sectors may be permitted to undertake job work from the DTA units provided the finished products produced by such EOU/ EPZ units will be exported directly from EOU/ EPZ unit itself and these goods will not be sent back to the DTA.

5.      The instructions cited in para 1 above stand modified the above extent.