This action of the public sector oil companies has adversely affected the competitiveness of the units in the global market as those in Maharashtra for instance have had to cough up the 30 per cent tax on high speed diesel (HSD) levied by the state government.

The oil companies have directed the units to utilise the bonded facility available in these two states for getting supplies of high speed diesel (HSD), according to representations received by the confederation of Export Units (CEU).

CEU has requested the oil companies that the affected units may be allowed to purchase petroleum products from wherever it is more economically viable for them, rendering them a competitive edge in the international market.

The Indian Oil Corporation (IOC) has taken the stand that the inter-state ban on movement of HSD where bonded strorage facility is available in states has not been revoked yet. The EOUs have therefore to use the facility for meeting their HSD requirements, IOC has said.

One of the affected units-Navnitlal Ltd-has stated that it has been directed by IOC to procure HSD supplies from the Mumbai though it will attract non-refundable levy of 30 per cent in Maharashtra. Earlier, the company had been receiving supplies from Koyali refinery in Gujarat and getting refund of four per ent central sales tax.

Following the announcement of the revised export and import policy on March 31, the revenue department has issued a number of notifications to give effect to those provisions relating to the EOUs/EPZs.

The department has allowed software technology park (STP) units to import captive power plants and captive generating sets without duty.

Further,acquaculture and agriculture EOU units have been allowed to import or procure HSD duty-free on the basis of the recommendation of the Board of Approval for EOUs. The Board will fix norms for each unit on the basis of which duty-free procurement of HSD will be permitted.

The function of trading by EOUs/EPZs/STP/electronic hardware technology park (EHTP) units has been elaborated. Now they can undertake repacking, lebelling, minor processing etc for which they will be eligible for procurement of duty-free materials.

Further, trading units can procure goods without duty from other EOU/EPZ/STP/EHTP units for exports. They will however be required to achieve positive net foreign exchange as a percentage of exports (NEEP) and export performance .