Lok Sabha Question No. 838 (UNSTARRED), answered on 2015-07-24
Subject: Export Oriented Units
Ministry: COMMERCE AND INDUSTRY
Asked by: CHIRAG PASWAN, KANWAR SINGH TANWAR

**GOVERNMENT OF INDIA**

MINISTRY OF COMMERCE & INDUSTRY

(DEPARTMENT OF COMMERCE)

## LOK SABHA

**UNSTARRED QUESTION NO. 838**

**TO BE ANSWERED ON 24** **TH** **JULY 2015**

**EXPORT ORIENTED UNITS**

**838(H).  SHRI CHIRAG PASWAN:**

**SHRI KANWAR SINGH TANWAR:**

Will the Minister of **COMMERCE & INDUSTRY (´ÉÉÉÊhÉVªÉ A´ÉÆ =tÉÉäMÉ àÉÆjÉÉÒ)** be pleased to state:

- 1.1. the details of Export Oriented Units (EOUs) presently functional in the country, State/UT-wise along with the objectives thereof and the incentives/concessions provided by the Government to them;
- 1.2. the quantum and value of export made from these units vis-a-vis target fixed along with its share in the total export of the country;
- 1.3. whether the Government has received proposals from various States/UTs including Bihar for setting up of such units, if so, the number of proposals received as well as approved during the said period along with the proposals lying pending for approval, State/UT-wise;
- 1.4. the period and reasons for these pending proposals along with the reaction of the Government for their speedy clearance;
- 1.5. whether the Government proposes to revive such units and if so, the details thereof; and
- 1.6. the measures taken by the Government to boost such units to enhance country's export along with the mechanism put in place to monitor and prevent the misuse of the concessions by these units?

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### ANSWER

**okf.kT; ,oa m|ksx jkT; ea=h  )Lora= izHkkj)** ( **Jherh fueZyk lhrkje.k** )

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

(a): The details of EOUs presently functional in the country, State/UT-wise are furnished in     Annex-I.

The objectives of EOU Scheme are as follows:

1. To boost exports and earn foreign Exchange.
2. To attract foreign investment and latest technology into the country.
3. To generate employment.
4. To upgrade skill and create a source of skilled man-power.
5. To develop backward area.
6. To create backward and forward linkage by way of sourcing of raw material from and supply of finished goods to DTA.

The incentives/concessions provided by Government to them are as follows:

1. Exemption from payment of Customs Duty and Central Excise Duties on goods imported/procured from DTA.
2. Reimbursement of Central Sales Tax (CST) on goods manufactured in India.
3. Reimbursement of duty paid on fuel procured from Domestic Oil Companies.
4. Reimbursement of additional duty of excise levied on fuel under the Finance Acts would also be admissible.

(b) : Exports made by these units for the year 2013-14 amounted to Rs. 82072.71 Cr. i.e. 4.3% of the total exports of the country in the said year. However, targets are not fixed separately for EOUs.

(c): Yes Madam, the number of proposals received as well as approved by the Government for such units during 2014-15, State/UT-wise are as per Annex-II.

(d): Receipt of applications for setting up of EOUs and their processing is a continuous process, and the same is done as per the provisions of the Foreign Trade Policy and other applicable laws. At present, there are only two proposals pending from Tamilnadu and Uttar Pradesh which relate to manufacture of defence products which require industrial license.

(e): No, Madam.

(f): To boost exports by EOUs, various incentives are being provided by the Government under Chapter 6 of Foreign Trade Policy in addition to the Central Customs and Excise Act, Rules and Regulations. These may be broadly listed as under:

1. Supplies by DTA manufacturer are eligible for deemed export benefits under Chapter 8 of Foreign Trade Policy.
2. Central Value Added Tax (CENVAT) on service tax paid.
3. DTA sale (including advance DTA Sale) upto 50% of F.O.B. value of physical Exports permitted on payment of concessional rate of duty.
4. FDI upto 100% permitted as per the guidelines of Department of Industrial Policy and Promotion.

There is a mechanism to monitor and prevent the misuse of the concession granted to the EOUs which is implemented through a joint control by the Ministry of Commerce (represented by the Development Commissioner) and the Ministry of Finance (represented by the Commissioner, Central Excise, Customs & Service Tax). There is statutory framework to monitor and prevent misuse of the EOU scheme through legal provisions made under the provisions of Foreign Trade (Development & Regulation) Act 1992, Customs Act 1962, Central Excise Act 1944 and Rules made thereunder. In the event that any EOU found violating any norm such as non/short fulfillment of export obligation, excess and inadmissible imports irregular and unauthorized DTA sales, excess reimbursement of CST, drawback on DTA sales, non-realization of export proceeds, irregular  de-bonding, non-receipt of re-warehousing certificates, etc. duty exemptions are withdrawn and necessary recoveries are made after following due process of law in addition to imposition of penalties etc. as per provisions of Foreign Trade (Development & Regulation) Act, 1992, Customs Act 1962, Central Excise Act 1944 and Rules made there under.

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**Annex-I**

The State/UT-wise breakup of number of functional Export Oriented Units is as under:

| **State/UTs**        |   **Units** | **State/UTs**    |   **Units** | **State/UTs**   |   **Units** | **State/UTs**   |   **Units** |
|----------------------|-------------|------------------|-------------|-----------------|-------------|-----------------|-------------|
| A & N Island         |           3 | Goa, Daman & Diu |          35 | Maharashtra     |         225 | Sikkim          |           0 |
| Andhra Pradesh       |          80 | Gujarat          |         203 | Manipur         |           0 | Tamil Nadu      |         407 |
| Arunachal Pradesh    |           0 | Haryana          |          67 | Meghalaya       |           1 | Telangana       |         171 |
| Assam                |           0 | Himachal Pradesh |           4 | Mizoram         |           1 | Tripura         |           0 |
| Bihar                |           1 | Jammu & Kashmir  |           3 | Nagaland        |           0 | Uttar Pradesh   |          58 |
| Chandigarh           |           3 | Jharkhand        |           2 | Orissa          |          10 | Uttrakhand      |           3 |
| Chhattisgarh         |           1 | Karnataka        |         446 | Pondicherry     |          13 | West Bengal     |          55 |
| Dadra & Nagar Haveli |          19 | Kerala           |          77 | Punjab          |          11 | **Total**       |        1986 |
| Delhi                |          18 | Madhya Pradesh   |          10 | Rajasthan       |          59 |                 |        1986 |

**Annex-II**

The details of number of proposals received as well as approved by the Government since        2014-15 is as under:

| Zone      | States             | 2014-15   | 2014-15   |
|-----------|--------------------|-----------|-----------|
|           |                    | Received  | Approved  |
| CSEZ      | Kerala             | 3         | 3         |
|           | Karanataka         | 22        | 20        |
| FASEZ     | West Bengal        | 3         | 0         |
|           | Bihar              | 0         | 0         |
|           | Jharkhand          | 0         | 0         |
|           | Orissa             | 0         | 0         |
|           | Assam              | 0         | 0         |
|           | Tripura            | 0         | 0         |
|           | Mizoram            | 0         | 0         |
|           | Manipur            | 0         | 0         |
|           | Meghalaya          | 0         | 0         |
|           | Nagaland           | 0         | 0         |
|           | Arunachal Pradesh  | 0         | 0         |
|           | Sikkim             | 0         | 0         |
| ISEZ      | Madhya Pradesh     | 0         | 1         |
| KASEZ     | Gujarat            | 14        | 10        |
| MSEZ      | Tamil Nadu         | 22        | 20        |
|           | Pondichery         | 0         | 0         |
|           | A & N Island       | 0         | 0         |
| NSEZ      | Delhi              | 0         | 0         |
|           | Haryana            | 2         | 2         |
|           | Uttar Pradesh      | 6         | 2         |
|           | Punjab             | 2         | 1         |
|           | Rajasthan          | 1         | 0         |
|           | Himachal Pradesh   | 0         | 0         |
|           | Jammu & Kashmir    | 0         | 0         |
|           | Chandigarh         | 0         | 0         |
|           | Uttrakhand         | 0         | 0         |
| SEEPZ     | Maharashtra        | 13        | 7         |
|           | Goa,Daman & Diu    | 0         | 1         |
|           | Dadra&Nagar Haveli | 1         | 0         |
| VSEZ      | Andhra Pradesh     | 9         | 8         |
|           | Chhatisgarh        | 0         | 0         |
|           | Telangana          | 12        | 10        |
|           | Yanam              | 0         | 0         |
| **Total** |                    | 110       | 85        |

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