The entire production of EOU/EPZ/EHTP/STP units shall be exported subject to the following:

• Unless specifically prohibited in the LOP/LOI, rejects may be sold in the Domestic Tariff Area (DTA) on payment of duties as applicable to sale under paragraph 9.9(b) of the Policy, on prior intimation to the Customs authorities. Such sales shall be counted against DTA sale entitlement under paragraph 9.9(b) of the Policy. Sale of rejects upto 5% of FOB value of exports shall not be subject to achievement of NFEP.
  
  
• Units, other than gems and jewellery units, may sell goods/ services upto 50 % of FOB value of exports, subject to fulfilment of minimum NFEP as prescribed in Appendix-I of the Policy and on payment of applicable duties. Sales made to a private bonded warehouse set up under paragraph 11.14 or to trading units set up under paragraph 9.21 of the Policy shall also be taken into account for the purpose of arriving at FOB value of exports by EOU/EPZ units provided payment for such sales are made from EEFC account. No DTA sale shall be permissible in respect of motor cars, alcoholic liquors, tea (except instant tea) and books and such other items as may be notified from time to time.
  
  Gems and jewellery units may sell upto 10% of FOB value of exports of the preceding year in DTA subject to fulfillment of NFEP as prescribed in Appendix 1 of the Policy. In respect of sales of plain jewellery, the recipient shall pay concessional rate of duty to the Customs in Indian rupees as applicable to sale from nominated agencies. In respect of studded jewellery, duty shall be payable in Indian rupees as notified by Customs.
  
  
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• EOU/EPZ/EHTP/STP units may be permitted to sell finished products which are freely importable under the Policy in the DTA over and above the levels permissible under sub paragraph (b) above, against payment of full duties, provided they have achieved the NFEP and EP as per Appendix-I of the Policy.
  
  
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• For services, including software units, sale in the DTA in any mode, including on-line data communication, shall be permissible up to 50% of FOB value of exports and/or 50% of foreign exchange earned, where payment for such services is received in free foreign exchange.
  
  
• By-products included in the LOP/LOI may also be sold in the DTA subject to achievement of NFEP and on payment of applicable duties within the overall entitlement of paragraph 9.9(b) of the Policy. Sale of by-products beyond the entitlements of paragraph 9.9(b) shall also be permissible on payment of full duties.
  
  

Note
In the case of units manufacturing electronics hardware and software, the NFEP and DTA sale entitlement shall be reckoned separately for hardware and software.

(Please refer CUS CIR NO.38/2003 DATE 06/05/2003 for Stock Transfer by an EOUs to DTA, Whether Covered under DTA sale of the EXIM Policy - Clarification regarding)

(Please see No.20/2002 -CE.,Dt.1/3/2002)

(Please see Cir No.31/2001 Cus dt.24/05/2001)