6.01

Application / Approval / Renewal of approval

(a) For setting up an EOU, three copies of application as in ANF 6 A of Appendices & ANFs may be submitted to DC.

(b) (i) Applications for setting up units under EOU scheme shall be approved or rejected by Units Approval Committee within 15 days, as per criteria indicated in Appendix 6 A of Appendices & ANFs and sector specific conditions relating to approval as in Appendix 6 B of Appendices & ANFs. In other cases, approval may be granted by DC after clearance by BOA.

(ii) On approval, a Letter of Permission (LoP) / Letter of Intent (LoI) shall be issued by DC / designated officer to EOU/ EHTP / STP / BTP unit. LoP / LoI shall have an initial validity of 2 years to enable the Unit to construct the plant & install the machinery and by this time the unit should have commenced production. In case the unit is not able to commence production in initial validity of 2 years, an extension of one year may be given by the DC for valid reasons to be recorded in writing. Subsequent extension of one year may be given by the Unit Approval Committee subject to condition that two thirds of activities including construction, relating to the setting up of the Unit are complete and Chartered Engineer’s certificate to this effect is submitted by the Unit. Further extension, if necessary, will be granted by the Board of Approval. All such LOPs/LOIs whose original or extended validity expires on or after 1st March 2020, may be deemed to be valid up to 31st December, 2020. Once unit commences production, LoP / LoI issued shall be valid for a period of 5 years for its activities. This period may be extended further by DC for a period of 5 years at a time.

(Above bold sentence has been added vide PUBLIC NOTICE NO. 67/2019, DT. 31/03/2020)

(c) Proposals for setting up EOU requiring industrial licence may be granted approval by DC after clearance of proposal by BOA (as per Appendix 6 C of Appendices & ANFs) and Department of IndustrialPolicy and Promotion within 45 days on merits.

(d) STP / EHTP complexes can be set up by Central Government, State Government, Public or Private Sector Undertakings or any combination thereof, duly approved by Inter-Ministerial Standing Committee (IMSC) in Ministry of Communication and Information Technology (Department of Electronics & Information Technology - DeitY). Application for setting up EHTP / STP unit shall be in format prescribed by DeitY and shall be submitted to officer designated by DeitY.

(e) BTP can be set up by Central Government, State Government, Public or Private Sector Undertakings or any combination thereof. Application for setting up of BTP shall be submitted to Department of Bio-Technology (DoBT) and such applications which meet guidelines prescribed by DoBT will be approved and recommended to DGFT for notification. Application for setting up of BTP unit shall be submitted to officer designated by DoBT.

(f) LoP / LoI shall specify item(s) of manufacture / service activity, annual capacity, projected annual export for first five years in dollar terms, Net Foreign Exchange (NFE) earnings, limitations, if any, regarding sale of finished goods, by-products and rejects in DTA and such other matter as may be necessary and also impose such conditions as may be required.

(g) LoP / LoI issued to EOU / EHTP / STP / BTP units by concerned authority would be construed as an authorization for all purposes. Standard format for LoP for EOU is given in Appendix 6D of Appendices & ANFs.

(h) EOUs shall have separate earmarked premises for separate LoP. Similarly, EOUs may be approved on leased premises provided lease has been obtained from Government Department / Undertaking / Agency. However, in case lease is obtained from private parties, it shall have a validity period of five years from date of LUT and DC shall satisfy himself of genuine nature of lease.

(i) On completion of approval period as provided for in Paragraph 6.05 of FTP, it shall be open to unit to continue under scheme or opt out of scheme. Where unit opts to continue, DC will extend approval period. If no intimation in this regard is received from unit within a period of six months of expiry of approval period, DC will take action, suo motu, to cancel approval under EOU scheme and take further action in this regard. Where units give their option to continue after expiry of six months as stipulated above, DC will grant extension after obtaining approval of BOA.