Contract farming

6.22

EOUs engaged in production/processing of agriculture/horticulture/aquaculture products, may on the basis of annual permission from the Customs authorities take out inputs and equipments (specified at Appendix-14-IJ) to the DTA farm subject to the following conditions:

(a) Supply of inputs by the EOUs to the contract farm(s) shall be subject to the input-output norms approved by the DGFT/BOA.

(b) There shall be contract farming agreement between the EOU and the DTA farmer(s);

(c) The unit has been in existence for at least two years and engaged in export of agriculture/horticulture/aquaculture products; otherwise it shall furnish bank guarantee equivalent to the duty foregone on the capital goods/inputs proposed to be taken out to the Deputy/Assistant Commissioner of Customs/Central Excise till the unit completes two years.