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Export Oriented Units (EOUs) – Fiscals & Tax Concessions:

Export Oriented Units (EOUs) are industrial units that are established for the purpose of producing goods and services for export. They are given various fiscal and tax concessions to encourage export-oriented production. Here are some of the key fiscals and tax concessions provided to EOUs:

  1. Duty-Free Import of Capital Goods:
    • EOUs are allowed to import capital goods and equipment without paying customs duty, provided they are used for production, processing, or packaging of goods for export.
  2. Duty-Free Import of Raw Materials and Components:
    • EOUs are permitted to import raw materials, components, and consumables without payment of customs duty, excise duty, or additional customs duty.
  3. Excise Duty Exemption:
    • EOUs are exempted from paying excise duty on goods produced for export. This exemption applies to both finished products and intermediate goods.
  4. Income Tax Benefits:
    • EOUs enjoy income tax benefits under Section 10B of the Income Tax Act. The profits derived from export activities are exempt from income tax for a specified period.
  5. No Central Sales Tax (CST):
    • EOUs are exempted from paying Central Sales Tax on goods procured from domestic suppliers.
  6. No State Sales Tax/VAT:
    • EOUs are generally exempt from paying State Sales Tax or Value Added Tax (VAT) on goods procured from domestic suppliers.
  7. No Service Tax:
    • Services used for export production by EOUs are exempt from service tax.
  8. No Import Duty on Spares and Consumables:
    • EOUs can import spares and consumables without payment of customs duty, subject to specified conditions.
  9. Single-Window Clearance:
    • EOUs are provided with a simplified and expedited clearance process for imports and exports through a single-window mechanism.

Overview of MSME Policy of Government of India:

The Government of India has formulated policies and schemes to promote Micro, Small, and Medium Enterprises (MSMEs) in the country. These policies aim to foster entrepreneurship, promote industrial development, and enhance the competitiveness of MSMEs. Here is an overview of the key components of the MSME policy:

  1. Definition of MSMEs:
    • The MSME sector is classified based on the investment in plant and machinery or equipment. The definition is periodically revised to accommodate changing economic conditions.
  2. Credit and Finance:
    • Various financial schemes and credit facilities are made available to MSMEs through banks, financial institutions, and specialized schemes like MUDRA Yojana.
  3. Technology Upgradation:
    • The government encourages MSMEs to adopt modern technologies through various schemes and incentives to enhance productivity and competitiveness.
  4. Skill Development and Training:
    • Skill development programs are conducted to equip MSME entrepreneurs and workers with the necessary technical and managerial skills.
  5. Market Promotion and Export Promotion:
    • The government supports MSMEs in accessing domestic and international markets through initiatives like National Small Industries Corporation (NSIC) schemes and export promotion councils.
  6. Infrastructure Development:
    • The government invests in the creation of industrial infrastructure, including industrial estates, technology parks, and common facilities centers.
  7. Cluster Development:
    • MSME clusters are promoted to encourage collaboration, resource sharing, and specialization among small businesses.
  8. Quality Certification and Standards:
    • Assistance is provided to MSMEs for obtaining quality certifications and adhering to national and international standards.
  9. Policy Advocacy and Representation:
    • MSME associations and organizations play a vital role in advocating for the interests of the sector and representing them to policy-making bodies.
  10. Credit Guarantee Schemes:
    • Credit guarantee schemes are implemented to provide collateral-free credit to MSMEs, reducing the risk for lenders.
  11. Technology Acquisition and Adoption Fund (TAAF):
    • TAAF is a scheme to encourage MSMEs to adopt clean and green technologies for sustainable production.
  12. Entrepreneurial and Managerial Development of SMEs (EMSDP):
    • The scheme focuses on providing training, skill development, and capacity-building for MSME entrepreneurs and managers.

These policies and schemes collectively aim to create an enabling environment for MSMEs to thrive, contribute to economic growth, generate employment, and promote innovation and entrepreneurship in India.