Financial Daily from THE HINDU group of publications
Tuesday, Oct 12, 2004
Financial Daily from THE HINDU group of publications Tuesday, Oct 12, 2004 |
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Industry & Economy
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Hotels `Hotels can import furniture under EPCG scheme' K.R. Srivats
New Delhi , Oct. 11 THE Government clarified on Monday that hotels could import furniture under the export promotion capital goods (EPCG) scheme. This clarification, according to a senior official of the Directorate General of Foreign Trade (DGFT), comes in the wake of doubts raised on this issue by a section of industry. Informed sources pointed out that the hotel industry is a service industry and therefore the issue of whether "furniture" would qualify as a capital good under the EPCG scheme for such an industry needed clarification from DGFT. "There is lot of clarity on what would constitute capital goods for the manufacturing goods sector under the EPCG scheme. But the same cannot be said in the case of services sector," sources said. Under the foreign trade policy, the EPCG scheme allows import of capital goods for pre-production, production and post-production at 5 per cent Customs duty subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under the EPCG scheme to be fulfilled over a period of 8 years reckoned from the date of issuance of licence. Capital goods are allowed at zero per cent duty for exports of agricultural products and their value-added variants. However, for EPCG licences with duty saved of Rs 100 crore or more, the same export obligation would be required to be fulfilled over a period of 12 years.
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