ELECTRONIC HARDWARE TECHNOLOGY PARK (EHTP)
SCHEME
Scheme - 1.
Attention is invited to Ministry of Commerce
Notification No. 42/N-83/92-97, dated 14th September, 1992, notifying the above
Scheme.
Scheme - 2.
In pursuance of the powers vested in sub-section
(1) of section 3 of the Foreign Trade (Development and Regulation) Act, 1992,
the Central Government hereby notifies the following amended Electronic
Hardware Technology Park (EHTP) Scheme.
Scheme - 3.
An Electronic Hardware Technology Park (EHTP) may
be set up by the Central Government, State Governments, public or private
sector undertakings or any combination thereof. An EHTP may be an individual
unit by itself or a unit located in an area designated as an EHTP.
Scheme - 4.
The Scheme will be administered by the Department
of Electronics, Government of India, New Delhi. AH applications for
establishing an area to be designated as an EHTP or for setting up an
individual unit as an EHTP may be made to the Department of Electronics. Such
applications will be considered by an Inter-Ministerial Standing Committee
(IMSC) constituted under the chairmanship of the Secretary, Department of
Electronics.
Scheme - 5.
An EHTP unit may in terms of the customs
notification issued for the purpose, import free of duty all types of goods,
including capital goods required by it for its production, provided they are
not prohibited items in the negative list of imports of the Export and Import
Policy (1992-97). Second-hand capital goods may also be imported by EHTP units
in accordance with the policy.
Scheme - 6.
An EHTP will be a duty-free and bonded area and the
manufacturing operations in the EHTP unit would be carried out in customs bond.
Scheme - 7.
The entire production of an EHTP unit shall be
exported except the sales in the Domestic Tariff Area (DTA) according to the
following norms:
Value addition Permissible sale in the
achieved by the EHTP. Domestic Tariff Area (DTA)
(a) Less than 15 per cent Nil
(b) 15 per cent - 25 per cent Up to 30 per cent of the production in value
terms of electronic items
including components manufactured by the EHTP unit.
(c) More than 25 per cent Up to 40 per cent of the production in value terms
of electronic items
including components manufactured by the EHTP unit.
Note: 1. An EHTP unit
may bunch the products manufactured by it for sale in the DTA within its
entitlement.
Scheme - 8.
The following supplies shall be counted towards
fulfilment of the export obligation of EHTP units:
(a) Supplies specified in para 121 of the EXIM policy;
(b) Supplies effected in DTA against payment in foreign exchange.
Scheme - 9.
The EHTP unit will be eligible for the following
benefits:
(i) Tax holiday - The EHTP will be exempted from payment of corporate
income-tax for a block of five years in the first eight years of its operation.
(ii) Clubbing of Net Foreign Exchange (NFE) - The NFE earned by an ERTP
unit can be clubbed with the NFE of its parent/associate company in the DTA for
the purpose of according Export House/ Trading House/Star Trading House status
for the latter. NFE for this purpose will be calculated according to the
formula given in para 138 of Chapter XII of the Export and Import Policy
(1992-97).
(iii) 100 per cent foreign equity - Foreign equity up to 100 per cent is
permissible in the case of EHTP units.
Scheme - 10.
Supplies made from the DTA to an EHTP unit will be
regarded as deemed exports and will be eligible for the benefits specified in
paragraphs 106 and 122 of the Export and Import Policy (1992-97), Such benefits
shall be available provided the goods supplied to the EHTP unit are
manufactured in the country and the supplies are made against a letter of
authority issued by an officer designated in this behalf by the Department of
Electronics, Government of India.
Scheme - 11.
The provisions of paragraphs 96, 104, 105, 109, 110
and 111 to 117, Chapter IX of the Export and Import Policy (1992-97) applicable
to Export Oriented Units (EOUs) and units in Export Processing Zones (EPZs)
shall also apply to the EHTP units subject to the following modifications:
(a) The word "EHTP" shall be substituted for the words
"EOU/EPZ" or "EOUs" or "EPZs", wherever they
occur, in these paragraphs.
(b) The words "Development Commissioner", wherever they occur,
shall be substituted by the words "the officer designated by the Department
of Electronics, Government of India".
(c) The word "BOA", wherever it occurs, shall be substituted by
the word "IMSC".
Scheme - 12.
"Value addition" for the purpose of this
scheme shall be expressed as a percentage and shall be calculated for a period
of five years according to the following formula:
Value addition = A-B X 100
Where A is the FOB value of exports realised by the
EHTP unit and B is the sum total of the CIF value of all imported inputs, the
CIF value of all imported capital goods and the value of all payments made in
foreign exchange by way of commission, royalty, fees or any other charges.
"Inputs" means raw materials, intermediates, components, consumables,
parts and packaging materials.
If any input is obtained from another EHTP unit,
the value of such input shall be included under B.
If any capital goods imported duty free are leased
from a domestic leasing company, the CIF value of the capital goods shall be
included under B.
Scheme - 13.
An EHTP unit may be set up for both software and
hardware in an integrated manner subject to the condition that the minimum
value addition for the software components will be 60 per cent and the DTA sale
of software shall be restricted to 25 per cent of the production of software in
value terms.
Scheme - 14.
In respect of an electronic unit established in an
EPZ or as an EOU under Chapter IX of that policy, the provisions of that
Chapter will apply.
Scheme - 15.
This notification is issued in public interest.