6.22

Contract Farming

EOUs engaged in production / processing of agriculture / horticulture / aquaculture products may, on basis of annual permission from Customs authorities, take out inputs and equipments (specified in Appendix 6 I of Appendices & ANFs) to DTA farm subject to following conditions:

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

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

(c) 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 duty and/or taxes foregone on capital goods / inputs proposed to be taken out, to Deputy / Assistant Commissioner of Customs, till unit completes two years.