EOU notes

EOU Benefits and Domestic Tariff Area (DTA) Sales

EOUs receive duty concessions on inputs used for exports, but domestic sales are permitted only within policy limits and with duties.

Main facilitation measures

Import or domestic procurement of inputs and capital goods without payment of specified duties, for authorised operations.
Permissible DTA sales subject to fulfilment of positive NFE and payment of applicable duties.
Facility of sub-contracting and inter-unit transfers under conditions.
Single-point administration through the Development Commissioner.

Why '100% export-oriented' is not absolute

The export commitment is read together with permissible DTA sales. Domestic sales are conditional, not unrestricted, and generally involve duties. Do not memorise one historical percentage as current law — check the consolidated policy before answering an operational question.

Income-tax holiday: a historical fact

EOUs once enjoyed an income-tax exemption under Section 10B of the Income Tax Act. That benefit has been phased out (sunset), so do not describe it as a current benefit.

Study Library and practice

Official references

FAQs

Can an EOU sell in India?

Yes, permissible DTA sales are allowed subject to policy conditions, positive NFE and applicable duties.

Do EOUs still get an income-tax holiday?

No. The Section 10B exemption has sunset; it is a historical benefit.