7.4

NFE under SEZ scheme shall be calculated according to the following formula:

Positive Net Foreign exchange Earning (NFE) = A-B >0

Where

A. is the FOB value of exports by the SEZ 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) If any goods are obtained from another SEZ/ EOU/ EPZ/ EHTP/ STP unit, or procured from international exhibitions held in India or precious metals are procured from nominated agencies, the value of such goods shall be included under ‘B’.

(Above Note no.1 has been corrected vide PN No. 17/2002, Dt. 05/06/2002)

[OLD (i) If any goods are obtained from another SEZ/EOU/EPZ/ EHTP/ STP unit or procured from an international exhibitions held in India the value of such goods shall be included under B.]

(ii) 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 with each unit.

(iii) For annual calculation of NFE, the value of imported capital goods and lumpsum payment of foreign technical know-how fee shall be amortized as under;

1st –2nd Year : 5% each year
3rd -5th Year : 10 % each year
6th –8th Year : 20% each year