| Date: |
02-02-2016 |
| Subject: |
Duty-free capital goods’ imports banned for power projects to push Make in India |
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NEW DELHI: The government has banned duty-free imports of capital goods for power generation and transmission projects under the Export Promotion Capital Goods (EPCG) scheme, providing a push to their domestic manufacture. This will benefit companies like BHEL, Alstom India and KEC Intl.
Under the Foreign Trade Policy, the EPCG scheme allows import of capital goods for preproduction, production and post-production at zero customs duty. The incentive was provided to spur investments and exports.
The government on Monday amended this clause to withdraw the benefit, providing a boost to domestic manufacturers that had been facing stiff competition from imports.
"Authorization under EPCG scheme shall not be issued for import of any capital goods for generation/transmission of power (including captive plants and power generator sets)," the Directorate General of Foreign Trade said in a notification. "Import of capital goods is not permitted under EPCG Scheme for generation/transmission of power."
In April-December 2015, India imported electrical machinery and equipment worth $4.7 billion, a 4.4% growth over previous year.
The EPCG scheme allowed import of capital goods, including spares for pre-production, production and post-production at zero duty subject to an export obligation of six times the duty saved on capital goods imported under the scheme, to be fulfilled in six years.
The scheme had also been under a cloud for abuse. The Directorate of Revenue Intelligence has found cases of second-hand goods being imported and benefit claimed.
Source : economictimes.indiatimes.com
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