The additional secretary in the commerce ministry, Nripendra Misra also indicated to representatives of the confederation of EOUs (CEU) at meetings in Mumbai and Chennai recently that a suggestion for allowing the units corporate holiday for the entire period of their operations would also be examined.

Currently, the units enjoy corporate tax holiday for a period of five years only. To another suggestion made by CEU that EOUs be allowed to clear imported capital goods with nil rates of duty after completion of debonding at the end of the stipulated period of five years under the EOU scheme, Misra indicated it would beconsidered by the government.

If the units wished to remain customs-bonded for more than five years, the fact had to be intimated to the development commissioner of the unit concerned, Misra said and clarified that the procedure would be automatic.

At present, EOUs are allowed to sell in the domestic tariff area (DTA) finished goods after payment of 50 per cent of customs or excise duties whichever is higher after fulfilment of 75 per cent export obligation.

At the above meetings, CEU had pleaded that the units might be allowed to carry forward such portion of DTA sales as had not materialised in a quarter and that it be allowed to be carried forward to the next quarter of the financial year.

To this, Misra said that the matter would be examined by the government.

Further, goods sold by EOUs in the DTA but found defective could be allowed to be brought back for repair and replacement as suggested by CEU, he said.

He said that in addition exports through courier services was being furthersimplified.

The additional secretary referred to a suggestion that DTA units be permitted to avail of industry rates of drawback where such rates had been fixed for purposes of supplies to EOUs. Where industry rates were not available, brand rates could be fixed. The point had been taken by the commerce ministry and it would have to talk to DGFT first and to the finance ministry later, he said.

He announced that the customs department had recently issued a circular allowing EOUs to set up private bonded warehouses for storing goods which were in transit.

Misra said that he had already written to the revenue department regarding amendment of the Central Sales Act (CST).

On a point raised that at times there was delay in CST refund, he said the facts and figures with him revealed that there was no inordinate delay in disbursals. There was a possibility of a small delay only during the period of budget presentation.

CEU had earlier wanted the government to consider granting the EOUs CST exemptioninstead of refund, which it said was time consuming.