Difference between Domestic Tariff Area(DTA), Export Oriented Unit(EOU) and SEZ
Вставка
- Опубліковано 27 сер 2024
- A firm in India can have an exporting unit located in a Domestic Tariff Area(DTA), Export Oriented Unit(EOU) and Special Economic Zone(SEZ). Each of these areas have a different tax treatment. The location of the unit may be decided based on the value of domestic sales versus international exports, nature of export items being produced, linkage of the firm's value chain with other countries etc. This video explains the basic difference between DTAm EOU and SEZ to help get over the confusion that new trade entrepeneurs might face.
This video is developed by the Office of the Additional Director General of Foreign Trade, Bengaluru as part of an initiative under the Niryat Bandhu Scheme of Government of India.
Disclaimer :: This video is for information and educational purposes only . For detailed procedure you should refer to the Foreign Trade policy and the Handbook of Procedures available on www.dgft.gov.in
That is my voice in the video😊
Congratulations!
@@shinemuzammil4270 You never appreciate good work. Isn't it?
Great work! Waiting for more of your videos.
And who is the other guy?
Nikkoo has become an established exporter now. She has good contacts with buyers and traders across the world. She is now thinking about manufacturing for the international market. She plans to manufacture plastic components for electronic devices and she has made a project plan for the same. She has done her analysis about world demand and has also talked to few buyers abroad who are interested in sourcing from her. She has anlaysed the source of raw materials, and has also figured out the approximate cost and financial support she would require to set up her small manufacturing plant. She is attending various trade fairs and seminars in plastics manufacturing area.
Recently in a seminar she attended, she came to know that she can establish her manufacturing unit as an Export Oriented Unit, or an EOU. Someone else also talked about setting up a manufacturing unit inside a Special Economic Zone, or an SEZ. There was one more person who told her that he is running his manufacturing plant from a DTA, or a domestic tariff area. This has confused Nikku. She wants to understand what do these terms mean and how it would affect her business decision to set up a manufacturing plant.
She decides to approach the Niryat Bandhu at a DGFT office.
Niryat Bandhu: Hi Nikku, How are you doing?
Nikkoo: Fantastic! My export business is doing very well. Thanks for the guidance earlier. Now I am thinking of setting up my own manufacturing unit in the area of plastic components.
Niryat Bandhu: Wow, that’s amazing. I am happy to hear that. How can I help you?
Nikkoo: I want to understand more about SEZ, EOU and DTA. What do these mean. I have tried googling these terms, but it thrown up very technical stuff. Can you make me understand it in simple terms please?
Niryat Bandhu: Sure. Let me explain.
DTA refers to Domestic Tariff Area. This is any place in the country, except those that belong in SEZs or EOU, EHTP, STP and BTPs. So if you set up a unit in any place in India, which do not belong to an SEZ, is not an EOU or EHTP, STP or BTP, you are in domestic tariff area. All the tax obligations, permissions and other requirments would be as per the regulatory and statutory requriements of the land.
Nikkoo: What does EOU, EHTP, STP, BTP mean?
Niryat Bandhu: Let me explain. Chapter 6 of the foreign trade policy talks about schemes related to export oriented units, that is EOUs, Electronic hardware technology parks, that is EHTP, Software technology parks, that is, STP and Bio-technology parks, that is BTP. The objective of creating these schemes is to promote exports, enhance foreign exchange earnings, attract investment for export production and employment generation.
These units are treated in a different way from the units established in DTA for taxation purposes. These units are allowed to bring in capital goods and raw materials without payment of duties, and use them to manufacturing export goods. This way, the export good don’t have to suffer multiple domestic duties that may or may not get refunded upon exports.
EOUs etc. are expected to generate net positive foreign exchange earnings over a period of time. That is the value of their exports should be more than the imports they have made.
Nikkoo: So who gives permission to set up these units? What if I decide to setup my unit in EOU? Whom should I approach?
Niryat Bandhu: You need to approach the Development Commissioner of SEZs and EOUs of your area. You can find out more about your DC from the website www.sezindia.nic.in
Then, you need to make an application to the unit approval committee presided over by the DC, which would give approval to you for setting up the EOU unit.
Similarly for setting up EHTP or STP you need to approch the concerned officer at Department of Electronics and Information Technology (DeitY), which is under the ministry that administers this scheme.
For setting up a BTP that is a bio technology park, you need to approach the designated officer at the Department of Biotechnology.
Nikkoo: So if I have understood it right, I need to apply for an EOU and not for a STP or BTP for making pastic components right?
Niryat Bandhu: Absolutely right. You need to approach your local Development commissioner for SEZs and EOUs and request for setting up an EOU unit.
Nikkoo: But what is SEZ? How is it different from EOU?
Niryat Bandhu: SEZs are like a separate island within country for taxation purposes. SEZs are treated as if they are outside India for customs purposes. Goods can be brought in SEZ without payment of customs duty or excise duty. Supplies to SEZ from other parts of India are treated as ‘exports’ and are entitled to all export benefits. On the other hand, supplies from SEZ unit to any unit in DTA is treated as ‘import’ and normal customs duty is payable.
SEZ units, similar to EOUs, may be set up for manufacture of goods and rendering services. Trading units are also permitted in SEZs.
SEZs are governed by a separate Act called SEZ Act and therefore they are different from EOUs that fall under chapter 6 of Foreign Trade Policy. SEZ units have a DC, in consultation with the unit approval committee, as their nodal officer for all required statutory permissions, right from their IEC issue, to clearances, approvals, safety certificates etc. This gives the benefit of single window clearance at one office, when compared with other schemes where multiple departments are involved in giving permissions and approvals.
Nikkoo: Okay, that’s nice to know. I have a friend who is running his unit in DTA? Can he convert his unit into EOU unit?
Niryat Bandhu: Yes of course. Existing DTA units may also apply for conversion into an EOU /EHTP / STP / BTP unit.
Nikkoo: So what if I have some domestic buyers too? Can I also sell to domestic tariff area and not export some products that I make?
Niryat Bandhu: Yes of course. You may sell a certain percentage of produce from EOUs in domestic tariff area too, after paying applicable duties. However, as the primary purpose of setting up such units, where you are exempted from various taxes is to promote exports, you are expected to generate net positive foreign exchange earnings over a period of time.
Nikkoo: Wow, that information helped me a lot. Thank you very much. My target is international market and I plan to export all my products. I will now find out from www.sezindia.nic.in approach the SEZ office to set up my unit. In case of doubt, I will get back to you.
How to get the analysis data, Example . I need the data for Import LED lighting details . How can i get ?
very helpful, great initiative by DGFT
Very good information helpful and great advice excellent explanation very useful great initiative by dgft knowledge opportunity your support and efforts thanks you God bless you sir and sisters jai hind 🇮🇳
An INFORMATIVE VIDEO.......A MUST WATCH.....
Very helpful. Thankyou
Very helpful
Thank You So much. Comprehensive Description, added to by existing knowledge in respect of Foreign Trade Policy.
Deserve to be Lauded.
Very nice
Hi,
I have a doubt in pan number registration for getting IEC code.
I am working in private company..every year end TDS will be made for income tax deduction or filing. Did this registration is visible for my company accounts department.
Thanks
Hi,
Is there any impact on job if pan card i slinked with IEC registration
Very simple explanation....I liked it....
Hello Sir, I am working in Cosmetics Manufacturing Co. who manufacture Soap, Shampoos, Body wash etc.
We export all category of Cosmetics Products except Sandalwood Soap, Sandalwood Shampoos, Body Wast etc. our logistics agent says , It is not allowed to exports by customs.
could you guide me what exactly rules for sandalwood products for exports. as per Ingredients we use 2-3 % of sandalwood extracts on products only.
Kindly help me , we will oblige
I requested to dgft please some videos of export policy convert in Hindi language because of most of Farmer also wants his products sales in foreign contrary but they not have information about export policy .
Mam/ Sir, please provide the special videos for anty dumping, types of exporters, types of gsp like p, w, h and its benefits for importers in India and other countries.... And what is IGM, EGM file and its mean.
is there sez or eou will free from income tax for first five years? is it true..as i want to open trading unit in sez .... can it be open in ahmedabad sez?
thank you so much
Please isko Hindi me bhejo
Thank you!!!.. Very clear aur consice explanation.
But wait such a poor selection of name nikku and niryat bandhu.... 😂
We should respect our language brother, we are now that much used to english words that we find our language names funny or not good