EOU / IGCR Compliance

Export Oriented Units (EOUs) are governed by Chapter 6 of the Foreign Trade Policy, 2023. Setting up an EOU requires approval of the Unit Approval Committee (UAC), headed by the jurisdictional Development Commissioner, which issues a Letter of Permission/Approval (LoP/LoA) valid for 1 year within which the unit must commence production or service — extendable by the Development Commissioner, for valid reasons, by up to a further 2 years.

Separately, any importer (EOU or otherwise) seeking concessional-rate customs duty on inputs imported for manufacture or a specified end use must comply with the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 ("IGCR Rules, 2022"), which replaced the earlier 2017 IGCR framework. Under IGCR 2022, the importer must first file one-time prior information in Form IGCR-1 on the common portal, upon which an IGCR Identification Number (IIN) is generated. A continuity bond — with such surety or security as the jurisdictional Deputy or Assistant Commissioner of Customs deems appropriate — must be executed before availing the concessional notification, and the IIN plus continuity bond details must be quoted on every Bill of Entry claiming the concession.

Non-receipt or short-receipt of imported goods at the declared premises must be intimated immediately via Form IGCR-2 on the common portal. The continuity bond is automatically debited on clearance of each Bill of Entry and the debit is made electronically available to the jurisdictional customs officer for monitoring end-use compliance.

EOU and IGCR compliance covers two regimes that give manufacturers concessional treatment on imported inputs. An EOU — Export Oriented Unit — operates under the Foreign Trade Policy framework (VERIFY: Chapter 6 of the FTP 2023-28 governs EOUs, EHTPs, STPs and BTPs), importing inputs duty-free and exporting the resulting products, with its bonded operations, DTA sales and export obligation monitored by Customs. The IGCR route — the Import of Goods at Concessional Rate of Duty Rules 2017 — allows a manufacturer to import specified capital goods and inputs at a concessional customs duty for use in its own manufacture, subject to the conditions and the end-use monitoring of the Rules.

Both regimes trade a duty concession for a compliance discipline. The EOU must maintain its bonded records, get its DTA clearances right, and satisfy its export obligation; the IGCR beneficiary must use the imported goods only for the approved purpose, maintain the prescribed records, and file the returns the Rules require. The concession is conditional, and the conditions are audited by Customs.

The cost of drifting out of compliance is the reversal of the benefit: the duty foregone becomes payable with interest under the Customs framework, and a unit that has operated for years on the concession faces a demand covering the entire period if its records do not support the use. The reversal risk is the reason the records matter more than the duty saved.

This service is for EOUs and manufacturers importing capital goods and inputs under the IGCR Rules 2017. We manage the EOU's bonding, record-keeping and DTA processes under the FTP framework, prepare and file the IGCR registrations and returns, maintain the end-use records, and manage the Customs interactions so the concessions stay earned.