K.R. Srivats

New Delhi, Jul 16

SECOND hand capital goods of Indian origin cannot henceforth be imported under the export promotion capital goods (EPCG) scheme, according to a policy circular issued by the Directorate General of Foreign Trade (DGFT).

Under EPCG scheme, capital goods could be imported for pre-production, production and post- production activities at a customs duty of 5 per cent, subject to an export obligation that is linked to the duty saved.

Official sources said a few cases had come to the notice of the authorities wherein capital goods of Indian origin were exported under duty neutralisation schemes (eg. DEPB scheme) and later imported as second hand capital goods under the EPCG scheme. This is not permissible and, therefore, the latest circular clarifying the position, the sources said.

(This article was published in the Business Line print edition dated July 17, 2005)
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