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Software parks, export units can take up trading

Our Bureau

NEW DELHI, May 28

THE Finance Ministry has permitted units set up in software technology parks, electronic hardware technology parks (EHTP), export-oriented units (EOU) and export processing zones (EPZ) to undertake trading activities.

The move to allow trading as a new activity, apart from various other activities including manufacture, services, development of software, agriculture etc was announced in the Exim Policy.

As per the norms specified by the Revenue Department, trading units can import or procure goods duty-free from the domestic tariff area (DTA) for the purpose of exports. Goods can also be procured from other EOU, STP, EHTP and EPZ units. However, they ar e allowed to supply goods to the latter or to DTA only against valid advance licenses or specific duty-free import entitlements.

Trading units have also been allowed to undertake re-packing, labelling, minor processing etc for which they are entitled to procure the required capital goods sans any payment of duties.

Some of the additional benefits extended to EOU, STP, EHTP and EPZ units include permitting them to source indigenous capital goods without paying duties. These units can also import items such as uninterrupted power supply systems, pollution control equ ipment, teleconference equipment, security systems, servo control systems etc duty-free.

Hitherto, software units were allowed DTA sale in any mode including on-line data communication up to 50 per cent of the f.o.b. value of exports. The Revenue Department has now permitted DTA sale up to 50 per cent of the foreign exchange earned against t he sale of such services.

STP units can also import captive power plants and captive generating sets sans any duty, apart from items such as UPS diesel generating sets and so on.

Units engaged in aquaculture and the agriculture sector have been allowed to import or procure high speed diesel duty-free on the basis of the recommendation of the Board of Approval (BoA). The BoA will fix norms for each unit.

In line with the Exim Policy announcement, EOU and EPZs have been permitted to undertake job work for DTA units in all sectors. DTA units will also be entitled to a brand rate of duty drawback for jobwork undertaken.

The Revenue Department has also permitted units to destroy obsolete capital goods and spares without payment of duty. Prior permission of the Customs is, however, mandatory.

Sops have also been extended to units in the granite sector in line with the agricultural sector. Capital goods imported under this scheme will now be allowed to be moved out for the purpose of evacuation.

Depreciation norms for capital goods too have been stipulated. The Government has allowed accelerated depreciation for capital goods other than computer and computer peripherals.