1. Attention is invited to Ministry of Commerce Notification No. 42/N-83/92-97, dated 14th September, 1992, notifying the above Scheme.
2. In pursuance of the powers vested in sub-section (1) of section 3 of theForeign Trade (Development and Regulation) Act, 1992, the Central Government hereby notifies the following amended Electronic HardwareTechnology Park (EHTP) Scheme.
3. An Electronic Hardware Technology Park (EHTP) may be set up by theCentral 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.
4. The Scheme will be administered by the Department of Electronics,Government of India, New Delhi. All applications for establishing anarea to be designated as an EHTP or for setting up an individual unit as anEHTP may be made to the Department of Electronics. Such applicationswill be considered by an Inter-Ministerial Standing Committee (IMSC)constituted under the chairmanship of the Secretary, Department of Electronics.
5. An EHTP unit may in terms of the customs notification issued for thepurpose, import free of duty all types of goods, including capital goodsrequired by it for its production, provided they are not prohibited items in thenegative list of imports of the Export and Import Policy (1992-97). Second-handcapital goods may also be imported by EHTP units in accordance with thepolicy.
6. An EHTP will be a duty-free and bonded area and the manufacturingoperations in the EHTP unit would be carried out in customs bond.
7. The entire production of an EHTP unit shall be exported except the sales inthe Domestic Tariff Area (DTA) according to the following norms :-
achieved by the EHTP
Permissible sale in the Domestic Tariff Area (DTA)
(a) Less than 15 per cent
(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.
8. The following supplies shall be counted towards fulfilment of the exportobligation of EHTP units :-
(a) Supplies specified in para 121 of the EXIM policy ;
(b) Supplies effected in DTA against payment in foreign exchange.
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 ERTPunit can be clubbed with the NFE of its parent/associate company in theDTA for the purpose of according Export House/Trading House/StarTrading House status for the latter. NFE for this purpose will be calculatedaccording to the formula given in para 138 of Chapter XII of the Export andImport Policy ( 1992-97).
(iii) 100 per cent foreign equity- Foreign equity up to 100 per cent permissible in the case of EHTP units.
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 and122 of the Export and Import Policy (1992-97). Such benefits shall be availableprovided the goods supplied to the EHTP unit are manufactured in the countryand the supplies are made against a letter of authority issued by an officerdesignated in this behalf by the Department of Electronics, Government ofIndia.
11. The provisions of paragraphs 96,104,105,109,110 and 111 to 117, ChapterIX of the Export and Import Policy (1992-97) applicable to Export OrientedUnits (EOUs) and units in Export Processing Zones (EPZs) shall also apply to theEHTP units subject to the following modifications :
(a) The word EHTP shall be substituted for the words EOU/EPZ or EOUsorEPZs, wherever they occur, in these paragraphs.
(b) The words Development Commissioner, wherever they occur, shall besubstituted by the words the officer designated by the Department ofElectronics, Government of India.
(c)The word BOA, wherever it occurs, shall be substituted by the wordIMSC.
12. Value addition for the purpose of this scheme shall be expressed as apercentage and shall be calculated for a period of five years according tothe following formula :
Value addition = (A - B)/AX 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 capitalgoods and the value of all payments made in foreign exchange by way ofcommission, 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 shallbe included under B.
If any capital goods imported duty free are leased from a domestic leasingcompany, the CIF value of the capital goods shall be included under B.
13. An EHTP unit may be set up for both software and hardware in anintegrated manner subject to the condition that the minimum valueaddition for the software components will be 60 per cent and the DTA sale ofsoftware shall be restricted to 25 per cent of the production of software in valueterms.
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.
15. This notification is issued in public interest.