Lok Sabha Question No. 208 (STARRED), answered on 2017-07-31
Subject: Concessions/Facilities to EOUs
Ministry: COMMERCE AND INDUSTRY
Asked by: RAM TAHAL CHOUDHARY, HARISHCHANDRA DEORAM CHAVAN

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA STARRED QUESTION NO. 208 TO BE ANSWERED ON 31 st JULY, 2017

## CONCESSIONS/FACILITIES TO EOUs

## *208.   SHRI RAM TAHAL CHOUDHARY: SHRI HARISHCHANDRA CHAVAN:

Will the Minister of COMMERCE & INDUSTRY ( वािणÏय एवं उɮयोग मंत्री ) be pleased to state:

- (a) the details of the concessions/ facilities being provided to the Export Oriented Units (EOUs) under the EOU scheme in the country;
- (b) whether  any  instances  of  misuse  of  these  concessions/facilities  have  come  to  the notice of the Government during the last three years and the current year;
- (c) if  so,  the  details  thereof  along  with  the  action  taken  by  the  Government  in  this
- (d) whether it is a fact that there is no provision to punish the offenders for misuse of the concessions/facilities under the schemes for promoting the export and if so, the reasons therefor along with the remedial measures taken in this regard so far; and
- (e) whether the objective of the scheme has been achieved by the Government, if so, the details thereof and if not, the reasons therefor along with the corrective measures taken by the Government in this regard?

## ANSWER

okf.kT; ,oa m|ksx jkT; ea=h ¼Jherh fueZyk lhrkje.k½ ¼Lora= izHkkj½

THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

- a) to  e):  A Statement is laid on the Table of the House.

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK SABHA STARRED QUESTION NO. 208   FOR ANSWER ON 31 st   JULY, 2017 REGARDING ' CONCESSIONS/FACILITIES TO EOUs '.

- (a):  Benefits available to EOUs after introduction of Goods and Services Tax (GST) regime include:
- -Duty free imports;
- -Benefit of MEIS scheme (Chapter 3 benefits of Foreign Trade Policy);
- -Reimbursement of Central Sales Tax (CST) on items not covered under GST;
- -Reimbursement of Customs duty paid on fuel procured from domestic oil companies.
- -Fast-track clearance to status holder units
- -Units are allowed to retain 100% of export earnings in EEFC accounts.
- (b) & (c): The number of cases during the last three years and in the current year where Show Cause Notices (SCNs) issued to EOUs for demand of duty because of alleged misuse of concessions are as under :-

| Year                      |   No. of cases of misuse where SCNs issued |   Demand of duty (in Rupees Crores) |
|---------------------------|--------------------------------------------|-------------------------------------|
| 2014-2015                 |                                        156 |                              527.35 |
| 2015-2016                 |                                        170 |                              468.12 |
| 2016-2017                 |                                         97 |                              325.58 |
| 2017-2018(till 30.6.2017) |                                         31 |                               54.88 |

Further,  during  the  last  three  years  and  in  the  current  year,  two  cases  have  been registered by Central Bureau of Investigation, against M/s Gaurika Gems & Jewels, Bund, Rajasthan, M/s A.I. Metals, Alwar, Rajasthan  and one case by Directorate of Revenue Intelligence against M/s Gaurav Pharma Ltd. Haryana for duty evasion. In 27 cases, penalties have been imposed under the provisions of the Foreign Trade (Development & Regulation) Act 1992 for violation of provisions of the Foreign Trade Policy 2015-2020 amounting to Rs. 36.90 lakhs.

- (d): No madam, there are sufficient provisions under the Customs Act, 1962 and Central  Excise  Act,  1944  which  provide  for  suitable  punishment  to  offenders including  fines,  penalties  and  prosecution  besides  recovery  of  duty  for  which concession  was  availed  by  EOU.  Instances  of  violation/misuse  are  dealt  by  the concerned Development Commissioner/Central Excise and Customs authorities as per  the  relevant  provisions  of  these  laws  as  and  when  detected.  For  violation  of Foreign Trade Policy provisions, penalty can also be imposed under the Section 11 of Foreign Trade (Development and Regulation) Act, 1992. Steps have been taken to curb such violations which include joint monitoring of the performance of the EOU Units by officers of Customs and Central Excise and Development Commissioners on a regular basis.

(e): The  EOUs  are  required  to  be  Net  Foreign  Exchange  (NFE)  positive  and continuity of the units is subject to their being NFE positive. The EOUs have been consistently  achieving  over  60  percent  positive  NFE  during  the  last  five  years  as detailed below:-

## Foreign exchange earned by EOUs

-  (Value in Rupees Crore)

| Year                      |   EOU's Exports |   EOU's Imports |   NFE by EOUs |   NFE as %age of export |
|---------------------------|-----------------|-----------------|---------------|-------------------------|
| 2012-13                   |        104088   |        37390.3  |      66697.9  |                 64.0782 |
| 2013-14                   |        104722   |        37390.1  |      67331.6  |                 64.2957 |
| 2014-15                   |        105490   |        39334.9  |      66155.5  |                 62.7123 |
| 2015-16                   |        107875   |        37896.7  |      69978.7  |                 64.8699 |
| 2016-17                   |         75156.9 |        26145.6  |      49011.3  |                 65.212  |
| 2017-18 (up to 30.6.2017) |         10461.9 |         3236.13 |       7225.76 |                 69.0674 |

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