Gargi Ranade (Company Secretary) 03 November 2015

Sale by eou against epcg license

Dear All, Please guide me , if EOU unit make sales against EPCG license , will it reduce the DTA Sale entitlement to the value of sale. In other words , what is the status of the EPCG Sales with regard to DTA Sales Entitlement. Whether EPCG Sales made by EOU enhance the DTA Sales entitlement or diminish the balance DTA Sales entitlement.

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Suryanarayana Sathineni (Consultant in Indirect Tax Matters) 22 January 2016

Dear Ranade,

Supplies from EOU to EPCG Licence Holder are nothing to do with DTA sale entitlement. such supplies are treated as exports and entitled for NFE fulfilment. Pl. go through the below para 5.07 of Foreign Trade Policy which clarifies that such supplies are entitled for NFE fulfilment.

　5.07 Indigenous Sourcing of Capital Goods and benefits to Domestic Supplier

A person holding an EPCG authorisation may source capital goods from a domestic manufacturer. Such domestic manufacturer shall be eligible for deemed export benefit under paragraph 7.03 of FTP. Such domestic sourcing shall also be permitted from EOUs and these supplies shall be counted for purpose of fulfilment of positive NFE by said EOU as provided in Para 6.09 (a) of FTP.

Regards

Surya