Clarification on eligibility of Exports made from SEZ/EOU units on behalf of the DTA units, but not through DTA units

Circular No.ES/393/2018-19                                                                          February 26, 2019

To: Members of the Council

Sub.: Clarification on eligibility of Exports made from SEZ/EOU units on behalf of the DTA units, but not through DTA units

Dear Member,

We would like to inform you that O/o DGFT has issued Policy Circular No. 20/2015-2020 dated 22nd February, 2019 clarifying about the eligibility of Exports made from SEZ / EOU units on behalf of the Domestic Tariff Area (DTA) units.

In this regard, DGFT had received references from exporters seeking clarification on eligibility of Exports made from Special Economic Zone (SEZ) / Export Oriented Units (EOU) units on behalf of DTA units under MEIS, in the context of the Para 3.06 – ineligible categories of MEIS, sub para (v), which states that SEZ / EOU / Electronic Hardware Technology Park (EHTP) / Bio-Technology Parks (BTP) / Free Trade & Warehousing Zones (FTWZ) products exported through DTA units are ineligible for MEIS rewards.

Now, O/o DGFT has examined the matter and clarified that –

  • Exports which are made / have been made directly from a EOU / SEZ unit to Foreign consumer in which export documents are prepared and filed at the customs office of concerned SEZ / EOU Unit, mentioning the name of the EOU / SEZ unit along with the name of the DTA unit on whose behalf the exports is made, would be eligible for MEIS benefits subject to condition that only one of the said units i.e. either EOU / SEZ unit or the DTA unit can claim the benefits under MEIS.

 

  • It is also clarified that above eligibility is applicable to only those cases where goods are produced by the EOU / SEZ unit and are exported directly to the foreign consumer, with the name of the DTA.
  • Furthermore, it is clarified that the MEIS benefits may be taken by the SEZ / EOU or DTA and not on the basis of disclaimer from the other firm, subject to fulfilment of each of the criterion as below for every shipping bill for which claim is made under MEIS
  1. Commercial Invoice shows name of the DTA exporter and name of the SEZ / EOU unit as the manufacturer.
  2. Declaration of intent to avail MEIS benefits has been specified in the Commercial Invoice.
  3. Related GST Invoice / ARE-1 has been filed by the DTA firm and shows the name of the SEZ / EOU unit as manufacturer and signed by both the DTA and SEZ / EOU unit as the case may be.
  4. Relevant Shipping bill shows the name of the exporter and shows the details as Factory sealed with the address and name of the EOU/SEZ unit.
  5. The scheme details in the related shipping bill are shown as EOU/EPZ/SEZ/EHTP/STP (with Scheme Code as 21 - E0U / EPZ / SEZ / EHTP / STP).
  6. Third party details in the related Shipping bill should show DTA.
  7. E-BRC should be in the name of the DTA firm.

Members may kindly make a note of the above clarification.

Thanking you,       

Yours faithfully,

S. BALARAJU
EXECUTIVE DIRECTOR