BoA can consider permitting EOU to ship prohibited items: DGFT

NEW DELHI: The commerce ministry today said the Board of Approval can consider permitting an export oriented unit (EOU) to ship prohibited items.

"In respect of an EOU, permission to export a prohibited item may be considered, by BOA, provided such raw materials are imported and there is no procurement of such raw material from DTA (domestic tariff area)," Directorate General of Foreign Trade (DGFT) said in a notification.

Currently, few products like pulses are not allowed to be exported due to shortage in the country.

The EoU scheme was introduced in December 1980. Under this, manufacturing units enjoyed 100 per cent income-tax exemption on profits from overseas sale and also duty free import of raw material. As the scheme had a sunset clause, the tax benefits were stopped from March 2010.

Board of Approval is a 19-member inter-ministerial body headed by Commerce Secretary S R Rao. It deals with special economic zones and EOUs related matters.

The DGFT also permitted export of a prohibited item under the Advance Authorisation scheme.

An Advance Authorisation is issued to allow duty free import of inputs, which are physically incorporated in the export product.

"Export of a prohibited item may be allowed under Advance Authorisation provided it is separately so notified subject to the conditions given therein," it said.