Section 18(6) in The Special Economic Zones Rules, 2006
(6)Units may also be setup for providing services or manufacturing services to Overseas Entities subject to following conditions, namely:-(a)Capital goods, raw materials including consumables sub-assemblies, components, semi-finished goods shall be supplied by the Overseas Entity free of cost;(b)Capital goods for setting up such facilities may also be supplied on loan or lease basis, provided the notional value of such capital goods shall be taken into account for calculation of Net Foreign Exchange Earnings under rule 53;(c)finished goods shall be exported out of the country or transferred to the Customs Bonded Warehouse to be maintained by the Overseas entity:Provided that any supplies of finished goods shall be as per the instructions of the Overseas entity;(d)the Unit shall receive the consideration for its manufacturing services in convertible foreign exchange directly from the said overseas entity;(e)in case the said manufacturing facility is used by the Unit for carrying out production on its own account, separate accounts shall be maintained for the manufacturing and service activity.Explanation. - "Overseas Entity" means a non-resident or a person of foreign origin and includes a company not incorporated in India.
