EOUs – Subcontracting of production process abroad

By Vijay Kumar

Para 6.21.5 the Handbook of Procedures, 2004-09 Vol.I (RE 2008) reads as follows:-

"In case of sub-contracting of production process abroad, goods may be exported from sub-contractor premises subject to conditions that job work charges shall be declared in export declaration forms, invoices etc. and full repatriation of foreign exchange.

Now this is amended to read as,

“In case of sub-contracting of production process abroad, goods may be exported from sub-contractor premises subject to conditions that at the time of clearance of goods, the EOU / EHTP / BTP / STP shall declare

(i) the transaction value of the finished goods to be cleared from the sub-contractor's premises abroad;

(ii) job work charges to be paid to the sub-contractor abroad; and

(iii) value of intermediate goods, supported with documents like

(a) sale price contract/or invoice for the finished goods,

(b) job work contract and

(c) the basis of arriving at the value of intermediate goods.

The EOU / EHTP / BTP / STP shall also ensure full repatriation of foreign exchange declared as the transaction value of the finished goods cleared from the sub-contractor's premises abroad.”

DGFT PUBLIC NOTICE No. 40 (RE-2008)/2004-2009 Dated 4 July, 2008