L. B. Singhal
Director General

SUB : AMENDMENT IN THE EOUs/SEZ POLICIES RELATING TO CLEARANCE OF SECOND HAND
          CAPITAL GOODS IN THE DTA

Paragraph 6.35 of Handbook of Procedures, Vol. I, has provided that EOUs can clear second hand capital goods in DTA on payment of duty after 2 years from the date of import. Similarly Paragraph 7.33.8 of the Handbook of Procedures, Vol. I, had provided that SEZ Units can clear second hand capital goods which are 10 years old on date of import in clearing these goods on payment of applicable duty after 2 years from date of import.

In the new Foreign Trade Policy second hand capital goods has been freely allowed. Earlier second hand capital goods which are not more than 10 years old were only allowed to be imported. Hence after announcement of the Foreign Trade Policy we had represented to Ministry of Commerce and DGFT that since second hand capital goods are now freely allowed by the DTA importers without any restrictions, second hand capital goods should also be allowed to be cleared from EOUs/SEZ Units in DTA. Shri T. Vasu, Vice-Chairman of the Council and myself had met Shri Jayant Dasgupta, Joint Secretary, Ministry of Commerce on 24-9-2004 on this issue.

DGFT has issued Public Notice No. 17/2004-2009 dated 15-10-2004. As per this Public Notice, paragraph 6.35 relating to EOUs and Paragraph 7.33.8 of Handbook of Procedures, Vol. I, relating to SEZs, have been amended. As per the amendments, clearance of capital goods, including second hand capital goods, in DTA has been allowed as per the policy under the EPCG Scheme. In other cases clearance in DTA has been allowed on payment of applicable duties and import policy in force on the date of such clearance. Accordingly the restrictions of clearing these goods in DTA only after 2 years from the date of import has been removed. A copy of this Public Notice is enclosed for your information.

This is for your information please.

_______________________________________

TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY

(PART – I, SECTION-I),

GOVERNMENT OF INDIA

MINISTRY OF COMMERCE & INDUSTRY

DEPARTMENT OF COMMERCE

PUBLIC NOTICE NO.17 /2004-2009

Dated : 15th Oct., 2004

In exercise of powers conferred under paragraph 2.4 of the Foreign Trade Policy, 2004-2009, the Director General of Foreign Trade hereby makes the following amendments in the Handbook of Procedures (Vol. I):-

1. Para 6.20.1 shall be substituted as under:-

“FOB value of exports of an EOU/EHTP/STP/BTP units can be clubbed with FOB value of exports of its parent company in the DTA or vice versa for the purpose of according Star Export House Status”.

2. Para 6.35 alongwith the heading shall be substituted as under:-

“Clearance of Capital Goods in DTA “ Clearance of Capital Goods including second hand in DTA shall be allowed as per the Policy under EPCG Scheme. In other cases, clearance in DTA may be allowed on payment of applicable duty and Import Policy in force on the date of such clearance”.

3. In the first sentence of paragraph 6.37.1, the word “concession” shall be inserted between the words “no” and “in”.

4. Para 7.20.4 shall be substituted as under:

“FOB value of exports of a SEZ unit can be clubbed with FOB value of exports of its parent company in the DTA or vice versa for the purpose of according Star Export House Status”.

5. Paragraph 7.32.2 shall be substituted as under:-

“Registering authority for SEZ units and SEZ developer, shall be the Development Commissioner of the SEZ concerned. A separate Registration-cum-Membership Certificate shall not be required in their cases as provided in the Policy”.

6. 6. Para 7.33.8 shall be substituted as under:-

“ Clearance of Capital Goods including second hand in DTA shall be allowed as per the Policy under EPCG Scheme. In other cases, clearance in DTA may be allowed on payment of applicable duty and Import Policy in force on the date of such clearance”.

This issues in Public interest.

Sd/- (K.T.Chacko)

Director General of Foreign Trade

(Issued from F.No.01/92/180/66/AM05/PC.II)

SUB : AMENDMENT IN THE EOUs/SEZ POLICIES RELATING TO CLEARANCE OF SECOND HAND CAPITAL GOODS IN THE DTA

Paragraph 6.35 of Handbook of Procedures, Vol. I, has provided that EOUs can clear second hand capital goods in DTA on payment of duty after 2 years from the date of import. Similarly Paragraph 7.33.8 of the Handbook of Procedures, Vol. I, had provided that SEZ Units can clear second hand capital goods which are 10 years old on date of import in clearing these goods on payment of applicable duty after 2 years from date of import.

In the new Foreign Trade Policy second hand capital goods has been freely allowed. Earlier second hand capital goods which are not more than 10 years old were only allowed to be imported. Hence after announcement of the Foreign Trade Policy we had represented to Ministry of Commerce and DGFT that since second hand capital goods are now freely allowed by the DTA importers without any restrictions, second hand capital goods should also be allowed to be cleared from EOUs/SEZ Units in DTA. Shri T. Vasu, Vice-Chairman of the Council and myself had met Shri Jayant Dasgupta, Joint Secretary, Ministry of Commerce on 24-9-2004 on this issue.

DGFT has issued Public Notice No. 17/2004-2009 dated 15-10-2004. As per this Public Notice, paragraph 6.35 relating to EOUs and Paragraph 7.33.8 of Handbook of Procedures, Vol. I, relating to SEZs, have been amended. As per the amendments, clearance of capital goods, including second hand capital goods, in DTA has been allowed as per the policy under the EPCG Scheme. In other cases clearance in DTA has been allowed on payment of applicable duties and import policy in force on the date of such clearance. Accordingly the restrictions of clearing these goods in DTA only after 2 years from the date of import has been removed. A copy of this Public Notice is enclosed for your information.

This is for your information please.

_______________________________________

TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY

(PART – I, SECTION-I),

GOVERNMENT OF INDIA

MINISTRY OF COMMERCE & INDUSTRY

DEPARTMENT OF COMMERCE

PUBLIC NOTICE NO.17 /2004-2009

Dated : 15th Oct., 2004

In exercise of powers conferred under paragraph 2.4 of the Foreign Trade Policy, 2004-2009, the Director General of Foreign Trade hereby makes the following amendments in the Handbook of Procedures (Vol. I):-

1. Para 6.20.1 shall be substituted as under:-

“FOB value of exports of an EOU/EHTP/STP/BTP units can be clubbed with FOB value of exports of its parent company in the DTA or vice versa for the purpose of according Star Export House Status”.

2. Para 6.35 alongwith the heading shall be substituted as under:-

“Clearance of Capital Goods in DTA “ Clearance of Capital Goods including second hand in DTA shall be allowed as per the Policy under EPCG Scheme. In other cases, clearance in DTA may be allowed on payment of applicable duty and Import Policy in force on the date of such clearance”.

3. In the first sentence of paragraph 6.37.1, the word “concession” shall be inserted between the words “no” and “in”.

4. Para 7.20.4 shall be substituted as under:

“FOB value of exports of a SEZ unit can be clubbed with FOB value of exports of its parent company in the DTA or vice versa for the purpose of according Star Export House Status”.

5. Paragraph 7.32.2 shall be substituted as under:-

“Registering authority for SEZ units and SEZ developer, shall be the Development Commissioner of the SEZ concerned. A separate Registration-cum-Membership Certificate shall not be required in their cases as provided in the Policy”.

6. 6. Para 7.33.8 shall be substituted as under:-

“ Clearance of Capital Goods including second hand in DTA shall be allowed as per the Policy under EPCG Scheme. In other cases, clearance in DTA may be allowed on payment of applicable duty and Import Policy in force on the date of such clearance”.

This issues in Public interest.

Sd/- (K.T.Chacko)

Director General of Foreign Trade

(Issued from F.No.01/92/180/66/AM05/PC.II)