| EPZ regions are designed for free trade. Manufacturing units, which are supposed to export their entire production of goods and services, can be established under the purview of Export Processing Zone (EPZ) Scheme, Export Oriented Unit (EOU) Scheme, Electronic Hardware Technology Park (EHTP) Scheme or Software Technology Park (STP) Scheme. These units undertake a wide range of activities including manufacture, services, repair, remaking, reconditioning, re-engineering not excluding making of gold/silver/platinum jewellery and articles thereof, agriculture, agro-processing, aquaculture, animal husbandry, horticulture, sericulture, pisciculture, poultry and many more. Power sector is also permitted to establish their units in EPZs. However no trading units are allowed to operate in EPZs.
Production units operating in the Export Processing Zones enjoy the benefits of basic infrastructural facilities like developed land, standard designed factory buildings, factory sheds, good connectivity through roads, guaranteed power and water supply.
The units in EPZs don’t have to incur any extra cost to avail the customer clearance facilities. The facilities of banking, post-offices and clearing agents are also easy accessible from the Service Centres adjacent to each zone.
All items manufactured in EPZs can be exported except those, which are being considered as restricted and prohibited items as per ITC (HS) classification of commodity. They can also export by-products, rejects, and waste scrap coming out of their manufacturing units.
Incentives Offered To EPZ Units: -
- The EPZ/EOU/EHTP/STP units are exempt from paying import duties while importing any type of good, including capital goods required for their production purpose, provided the fact that their imported items are not the prohibited ones as per ITC (HS) commodity classification.
- Tax holiday is granted for any 5 consecutive years within the first 8 years from the date of commencement of production.
- The SEZ units need to take proper security arrangements to meet all the prerequisites of the laws, rules and procedures applicable for SEZ units.
- The EPZ units are relieved from paying any sales tax and excise duty for all local purchases.
- The EPZ units are allowed to convert all foreign exchange earnings at market determined rate
- Foreign equity upto 100 percent is granted for units operating in the EPZs.
Other Benefits
- Units functional in Export Processing Zones and 100 percent export oriented units are permitted to dispose of certain percentage of their products in domestic market.
- Food Processing Units operating in the EPZs with an intake of 30 percent indigenous input are permitted to sell upto 50 percent of their total output in the local market.
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