meity.gov.in Electronic Hardware Schemes : Ministry of Electronics & Information Technology

Organisation : Ministry of Electronics & Information Technology (MEITY)
Facility : Electronic Hardware Schemes
Applicable For : Electronics Hardware Sector
Scheme Details : http://meity.gov.in/electronic-hardware-schemes
Website : http://meity.gov.in/home

MEITY Electronic Hardware Schemes

Special schemes are available for setting up Export Oriented Units for the Electronics Hardware Sector. Various incentives and concessions are available under these schemes.

Related : MEITY BPO Promotion Scheme : www.statusin.in/37159.html

SEZ Scheme

Special Economic Zones (SEZ) Scheme
As per the “Special Economic Zones Rules, 2006”, notified by the Department of Commerce, in case a SEZ is proposed to be set up exclusively for electronics hardware and software, including information technology enabled services, the area shall be ten hectares or more with a minimum built up processing area of one lakh square meters.

EPCG Scheme

Export Promotion Capital Goods (EPCG) Scheme
The Zero duty EPCG Scheme is available to exporters of electronic products. It allows import of capital goods for pre-production, production and post-production (including CKD/SKD thereof as well as computer software systems) at zero% customs duty, subject to an export obligation equivalent to 6 times of duty saved on capital goods imported under EPCG scheme, to be fulfilled in 6 years reckoned from Authorization issue-date.

The concessional 3% duty EPCG Scheme allows import of capital goods for pre-production, production and post-production (including CKD/SKD thereof as well as computer software systems) at 3% customs duty, subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under EPCG scheme, to be fulfilled in 8 years reckoned from Authorization issue-date.

The capital goods shall include spares (including refurbished/reconditioned spares), tools, jigs, fixtures, dies and moulds. Second hand capital goods, without any restriction on age, may also be imported under the EPCG Scheme.

The export obligation can also be fulfilled by the supply of ITA-1 items to the DTA, provided the realization is in free foreign exchange.

Duty Exemption and Remission Schemes

Duty exemption schemes enable duty free import of inputs required for export production.
Duty exemption schemes consist of :
** Advance Authorization scheme
** Duty Free Import Authorization (DFIA) scheme

A Duty Remission Scheme enables post export replenishment / remission of duty on inputs used in export product.
Duty Remission Schemes consist of :
** Duty Entitlement Passbook (DEPB) Scheme
** Duty Drawback (DBK) Scheme

Deemed Exports

“Deemed Exports” refer to those transactions in which the goods supplied do not leave the country, and the payment for such supplies is received either in Indian rupees or in free foreign exchange.

The following categories of supply of goods by the main/ sub-contractors are regarded as “Deemed Exports” under the Foreign Trade Policy, provided the goods are manufactured in India

(a) Supply of goods against Advance Authorization/Advance Authorization for annual requirement/DFIA

(b) Supply of goods to Export Oriented Units (EOUs) / Software Technology Park (STP) units / Electronic Hardware Technology Park (EHTP) units / Bio Technology Park (BTP) units
(c) Supply of capital goods to Export Promotion Capital Goods (EPCG) Authorization holders

(d) Supply of goods to projects financed by multilateral or bilateral Agencies/Funds as notified by the Department of Economic Affairs, Ministry of Finance under International Competitive Bidding (ICB) in accordance with the procedures of those Agencies/Funds, where the legal agreements provide for tender evaluation without including customs duty

(e) Supply of capital goods, including in unassembled/disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till the stage of commercial production, and spares to the extent of 10% of the FOR value to fertilizer plants

(f) Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty
(g) Supply of goods to the power projects and refineries not covered in (f) above

(h) Supply of marine freight containers by 100% EOU (Domestic freight containers – manufacturers) provided the said containers are exported out of India within 6 months or such further period as permitted by the customs;

(i) Supply to projects funded by UN agencies
(j) Supply of goods to nuclear power projects through competitive bidding as opposed to ICB.

The benefits of deemed exports shall be available under paragraph (d), (e), (f) and (g) only if the supply is made under the procedure of ICB.

Benefits for Deemed Exports

Deemed exports shall be eligible for any/all of the following benefits in respect of manufacture and supply of goods qualifying as deemed exports subject to the terms and conditions as given in the Chapter-8 of Handbook of Procedures (Vol.I), 2009-2014 of the Department of Commerce, Ministry of Commerce & Industry

(a) Advance Authorization/Advance Authorization for annual requirement/DFIA
(b) Deemed Export Drawback.
(c) Exemption from terminal excise duty where supplies are made against ICB. In other cases, refund of terminal excise duty will be given.

The details of “Deemed Exports” scheme are available in Chapter-8 of India’s Foreign Trade Policy and Procedures on the website of the Department of Commerce, Ministry of Commerce & Industry