Date:22/10/2004 URL: http://www.thehindubusinessline.com/2004/10/22/stories/2004102202780600.htm

Back Sale of second-hand capital goods — Norms eased for export units in DTA

K.R. Srivats

New Delhi , Oct. 21

THE Government has eased the norms for sale of second-hand capital goods in the Domestic Tariff Area (DTA) by export-oriented units that had imported such goods under the export promotion capital goods (EPCG) scheme.

The Directorate-General of Foreign Trade has done away with the existing stipulation that allowed EOUs to sell second-hand capital goods in DTA only after two years of the import of such capital goods by these units.

Informed sources said that the stipulation has been removed consequent to the recent announcement in the foreign trade policy (2004-09) permitting units in the DTA to import second-hand capital goods without any age restrictions under the EPCG scheme.

Prior to the FTP announcement of August 31, DTA units were not allowed to import capital goods that are more than 10 years old under the EPCG scheme. "When the 10-year age restriction was there, it was necessary to have the two-year stipulation for EOUs. Otherwise, the units in the DTA would source their requirements of second-hand capital goods that are more than 10 years old through the EOUs. With the age restriction gone for second-hand capital goods, the stipulation for EOUs have also been done away with," sources said.

For clearance of capital goods in DTA by EOUs, the Exim procedures now specify that the "clearance of capital goods including second-hand in DTA shall be allowed as per the policy under the EPCG scheme. In other cases, the clearance in DTA may be allowed on payment of applicable duty and import policy in force on the date of such clearance".

Similarly, the two-year stipulation has been removed for units in software technology parks/ Electronic Hardware Technology Parks and units in special economic zones.