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Circular No. 43/98-Customs
dated 26/6/1998
F.No. 314/19/98- FTT
 
Government of India
Ministry of Finance, Department of Revenue
(Central Board of Excise and Customs), New Delhi

Sub:    Debonding of Capital Goods from the EOU /EPZ / EHTP / STP Units.

        I am directed to refer to Board's Circular No. 27/98-Cus issued from F. No. 314/19/94-FTT dated 21.4.98. It has been provided in para 4 of the above said Circular that the depreciation for capital goods other than computers, at the following rates may be allowed:
 

      For every quarter in the 1st year - 4%

      For every quarter in the 2nd year - 3%

      For every quarter in the 3rd year - 3%

      For every quarter in the 4th year - 2.5%

      For every quarter in the 5th year - 2%

      and thereafter

      subject to a maximum of 75%

2.    Representations have been received from the Trade and recommendations from the Ministry of Commerce that the above said depreciation norms may be raised to an overall limit of 90% as provided in the Exim Policy as also in the Income Tax Rules, 1962.

3.    The issue has been re-examined by the Board and it has been decided to revise the depreciation norms for the capital goods other than computers and computer peripherals, to 90% with the following stipulations:
 

      For every quarter in the 1st year - 4%
      For every quarter in the 2nd year - 3%
      For every quarter in the 3rd year - 3%
      For every quarter in the 4th year - 2.5%
      and thereafter,
      subject to a maximum of 90%
4.    The Circular No. 27/98 stands modified to the above extent.

5.    The above may be given a wide publicity by issue of Public Notice. Cases already decided may not be reopened.

Sd/-
(O.P. Khanduja)
Sr. Technical Officer (FTT)