9.40 Net foreign exchange earning as a percentage of exports (NFEP) under EOU / EPZ / SEZ / EHTP / STP schemes, as provided in paragraph 9.29 of the Policy, shall be calculated according to the following formula:

A - B NFEP= --------- x 100,

A Where

NFEP is Net Foreign Exchange Earning as a Percentage of Export

A) is the FOB value of exports by the EOU / EPZ / EHTP / STP unit; and

(B) Is the sum total of the CIF value of all imported inputs, the CIF value of all imported capital goods, and the value of all payments made in foreign exchange by way of commission, royalty, fees, dividends, interest on external borrowings during the first five year period or any other charges. "Inputs" mean raw materials, intermediates, components, consumables, parts and packing materials.

Note-I: (1) If any input is obtained from another EOU / EPZ / EHTP / STP unit, the value of such input shall be included under B.

(2) If any capital goods imported duty free is leased from a leasing company, received free of cost and/or on loan basis or transfer, the CIF value of the capital goods shall be included or excluded, as the case may be, pro- rata, under B for the period it remains under bond.

(3) For annual calculation of net foreign exchange as a percentage of exports, 1/5th value of imported capital goods and lumsum payment of foreign technical know-how fee shall be included under B above.

(4) In the case of projects where the investment in land, building, plant and machinery exceeds Rs.200 crores, the value of the capital goods shall be amortised over a period of seven years; i.e. in such cases, only 5/7th of the CIF value of the imported capital goods shall be included under B.