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K.R. Srivats

New Delhi, May 11

The Finance Ministry has reduced customs duty payable under the export promotion capital goods (EPCG) scheme from 5 per cent to 3 per cent. This move comes nearly a month after the Commerce Minister, Mr Kamal Nath, had, in the Foreign Trade Policy (FTP) annual supplement, announced changes to the EPCG scheme so as to re-emphasise the importance of modernisation of export units.

The reduced customs duty rate of 3 per cent would be applicable for capital goods for pre-production, production and post-production including second-hand capital goods, officials said. Also, capital goods in semi knocked down (SKD)/completely knocked down (CKD) conditions can be imported at the reduced rate.

Spare parts of capital goods or plant and machinery too, can be imported at 3 per cent customs duty.

The Finance Ministry has also now allowed the lowering of average export obligation under EPCG scheme for the year 2007-08 in the case of those sectors or product groups that have a decline in export of more than 5 per cent in 2007-08.

The average export obligation of the licencee for the year 2007-08 could be reduced proportionate to the reduction in exports of that sector/product group during 2007-08 against 2006-07.

The FTP annual supplement had also specified that exports made towards fulfillment of export obligation under EPCG would be eligible for incentives/rewards under the promotional scheme.

Moreover, payment of duty under the EPCG scheme through debit of Duty Entitlement Passbook (DEPB) scheme or any other duty credit scrips would be allowed from January 1, 2009.

More Stories on : Excise and Customs | Exports & Imports | Engineering

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