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Unit 5: Exemptions and Deductions – II

additional employment. The scheme has witnessed many changes over the last twenty-four Notes
years in the context of ever changing economic realities. However, the basic premise remains
the same. This premise is that the exporters are treated as a special class and given the required
tariff, non-tariff and policy support to facilitate their export efforts. Thus, today the EOU Scheme
has emerged as a dynamic policy initiative facilitating the exporting community in the task of
increased exports. The EXIM Policy, 2002–07 reinforces the importance of Scheme in chapter 6 of
the policy.

Did u know? Need for Special License
To set up an EOU for the following sectors, an EOU owner needs a special license.
1. Arms and ammunition,
2. Explosives and allied items of defence equipment,

3. Defence aircraft and warships,
4. Atomic substances,
5. Narcotics and psychotropic substances and hazardous chemicals,
6. Distillation and brewing of alcoholic drinks,

7. Cigarettes/cigars and manufactured tobacco substitutes.
In the above mention cases, EOU owner are required to submit the application form to the
Development Commissioner who will then put them up to the Board of Approvals (BOA).

Major Sectors in EOUs

The following is the list of major sectors in EOUs:

Granite
Textiles/garments
Food processing

Chemicals
Computer software
Coffee
Pharmaceuticals

Gem & jewellery
Engineering goods
Electrical & electronics
Aqua & pearl culture

Categories of 100% EOUs

The 100% EOUs fall into three categories:
(a) EOUs established anywhere in India and exporting 100% products except certain fixed
percentage of sales in the Domestic Tariff Area (DTA) as may be permissible under the
Policy.

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