Legal undertaking / LUT execution
After obtaining the initial approval the STP / EHTP units have to enter into a LUT with
STPI. The following is the procedure for the execution of the legal agreement :
1. Acceptance to the standard terms and conditions of the approval letter and the
conditions stipulated at Annexure 1A (see below)
2. The acceptance letter to be sent to MIT and SIA with a copy to STPI Chennai, to the
addresses specified at Annexure 1B (see below)
3. Legal agreement as per the specified format (download available in the web site) has
to be typed on a Rs. 50.00 stamp paper.
4. The legal agreement should be signed on all the pages.
5. Common embossed seal to be affixed on all the pages.
6. Witness signatures to be done
7. Importer exporter code number obtained from DGFT has to be enclosed
8. Board resolution copy to be enclosed
9. Advance Service charges
10. Application of the Green Card (available for download in the web site)
11. Bank certificate for maintaining the bank account
12. Photo copy of the legal agreement with original signatures
13. List of CG import as per format
(Des Qty Value)
14. List of CG indigenous as per format
(Des Qty Value)
Check list for LUT execution:
1) Service Charges
2) Verification of the name with the approval letter
3) Execution date of the legal agreement should be after the approval
date, IEC date and date of the Demand Draft
4) STPI’s approval No. to be mentioned in Page No.1, para 2, 1 st line
and Clause No.9 of the legal agreement.
5) Acceptance letter to be submitted to STPI-Chennai, SIA and MIT
6) Reference No. mentioned in the acceptance letter should be
mentioned in Page No.1, para 2, last line of the legal agreement.
7) Common Embossed seal to be affixed
8) Director’s signature to be affixed on the place provided with their
9) Witness signature to be obtained with the address
10) Value of list is within the approved limit
11) Value of list is within the approved limit
STANDARD CONDITIONS ATTACHED TO THE LETTER OF INTENT/
PERMISSION IN RESPECT OF EHTP/STP SCHEME
1. The production of the undertaking under this scheme shall be carried out in
the customs bonded area. Location of the undertaking would be subject to
clearance by the concerned collector of Customs. You are, therefore advised to
approach the jurisdictional Collector of Customs and Central Excise
immediately in this behalf
2. Import of Capital goods, raw materials and components for production under
the scheme shall be exempted from Customs duties in terms of Customs
notification in force, subject to the conditions specified therein. likewise,
indigenously procured capital goods components and raw materials required by
the undertaking would also be exempt from the levy of excise duties in
terms of customs notification subject to the fulfillment of the conditions
3 The finished products authorized for manufacture/production under the scheme
shall be exempted from payment of excise duties on their export from India subject
to the observance of the prescribed procedures. Export duties shall be livable
unless specifically exempted. The sale of goods manufactured in DTA would be
permitted as per the prescribed policy and excise duties shall be levied as per
prescribed rates. The clearance of rejects, waste of scrap material rags,
trimmings, etc. shall be governed by the provision of policy as notified from time to
time and clearance by customs authorities in accordance with their notification.
4. On completion of the stipulated export obligation period covered by bond
Government may decide the conditions under which the undertaking may be
allowed to produce for domestic tariff area and the conditions so decided shall be
conditions attached to the concerned industrial license of such undertaking.
5. On de-bonding after the period of export obligation, the undertaking will be
liable to pay the following:-
1) Customs duty on capital goods on the depreciated values but at rates
provolone on the date of importing.
2) Customs duty on unused imported raw materials and component on
value of the time of import and the rates in force on the date of clearance, and
3) In respect of exciseable goods excise duty to be levied without depreciation
on such good and at rate attracted as on date of clearance.
6. The undertaking will have to execute a bond/legal undertaking with the
jurisdictional Director, STP and the undertaking would be liable to penalty in
terms of such bond/legal undertaking besides on penalty, if any, under the
Import Trade Control Regulation or any other regulation as may be applicable.
7. If the undertaking fails to fulfill its export and other obligations under this
scheme it will be liable to pay all penalties, customs and excise duties and such
other amounts as may be decided by the Government.
8. Adequate steps shall be taken to the satisfaction of the Government to prevent
air, water and soil pollution, such anti-pollution measures to be installed should
conform to the effluent and emission standards prescribed be State Government
in which the factory of the Industrial undertaking is located. Further, adequate
Industrial safety measures as provided in the Factories Act shall be made to the
satisfaction of the State Government in which the factory of the Industrial
undertaking is located.
9. External Commercial borrowing, if any, shall be subject to the approval of
Ministry of Finance (D/o Economic affairs - ECB Division).
10. Import of US controlled items will be subject to the following terms and
1. The applicant will import the item into India and shall not redirect it or any
part of it to another destination before its arrival in India.
2. The applicant shall provide, if asked, verification that procession of the
items was taken.
3. The applicant shall not re-export the item without written approval of
the certificate Issuing Authority.
4. The applicant shall not retransfer for within India the item(s) specified in
the Certificate without the written approval of the certificate Issuing
5. The applicant shall obtain permission in writing from the certificate Issuing
Authority prior to any change in the end user which shall be preceded by
the new user notifying the Certificate Issuing Authority that he/she agrees
to the conditions contained in this document(i.e. certificate).
The applicant shall obtain permission from the certificate issuing authority
before export of products manufactured out of US controlled it.
11. The applicant is required to send the quarterly progress report of
implementation of the project in the prescribed proforma to the department of
Electronic and their designated officers as notified by Department of Electronics.
Secretary of Industrial Assistance
Ministry of Industry
Department of Industrial Development
New Delhi – 110 001.
Industrial Promotion Division,
Ministry of Information Technology,
No.6, CGO Complex,
New Delhi – 110 001