The Hindu Business Line : DGFT provides relief to capital goods industry

New Delhi, Aug. 6 The Directorate General of Foreign Trade has amended the foreign trade policy to provide a measure of relief to the domestic capital goods sector reeling under downturn by rendering the sale of imported capital goods, including second-hand in domestic tariff area from the holders of Export Promotion Capital Goods Scheme, unattractive.

According to the policy hitherto in vogue, “clearance of capital goods, including second hand in DTA shall be allowed as per foreign trade policy under EPCG scheme”.

EPCG scheme allows import of capital goods at a concessional 5 per cent duty as an export incentive to promote exports of manufactured goods, while others have to shell out normal applicable import duty when they import capital goods.

clubbing all

In the policy amendment announced on Monday, the DGFT has made the EPCG holders by clubbing all capital goods importers, including second hand machinery and EPCG holders, to dispose their machinery in the domestic market only “on payment of applicable duty and import policy in force on date of such clearance.”

This meant, besides disbursal of normal applicable duty, the sale of such imported capital goods would require licence from the DGFT or its various regional outfits.

This would impact all those export oriented units, Electronic Hardware Technology Parks, Software Technology Parks Scheme and Bio-Technology Parks which remain the major beneficiary of the EPCG scheme if they decide to sell their existing capital goods in the domestic market to go in for fresh ones for expansion or upgradation.

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