Circular No. 98/2003-Cus.
18th November, 2003

Government of India
Ministry of Finance
Department of Revenue

Sub : DFCEC Scheme for Service Providers-whether import of all capital goods which are other than professional equipment or office equipment is also permissible-reg.

In terms of Para 3.8 of the EXIM Policy, Duty Free Credit Entitlement Certificate (DFCEC) for Service Providers has been notified.  The said Para 3.8 of EXIM Policy permits import of spares, office equipments and furniture, professional equipments and consumables other than agriculture and dairy products.

2. Commissioner of Customs (Export), ACC, Sahar had raised an issue whether under DFCEC Scheme, import of all capital goods including professional equipments could be allowed.  This doubt has also been created on account of usage of the words “capital goods” in condition (3) of Customs Notification No.54/2003.

3. This issue has been examined in consultation with DGFT/MOC. DGFT have confirmed that the objective of DFCEC Scheme for Service Providers is to permit import of aforesaid goods with a view to increase the capability of the service providers so as to enable him to render a better and efficient service.  With this in mind import of professional equipments which are required in the profession of the service providers has been allowed.  However, in so far as capital goods are concerned, its import to service provider has already been allowed through EPCG route.  Therefore, in so far as DFCEC Scheme is concerned, under the category of professional equipments, import of only those equipments would be permissible under DFCEC Scheme, which are Professional Equipments required by the Service Provider for the purpose of rendering service and earning free foreign exchange.  It is reiterated that import of capital goods which are other than professional equipment or office equipment shall not be allowed under DFCEC Scheme for Service Providers.  In order to remove doubts, the words “capital goods” used in condition (3) of 54/2003-Cus. dated 1.4.2003 has also been corrected to read as “professional equipment” by issue of corrigendum (copy enclosed).

4. Suitable Public Notice for Trade and Standing Order for the guidance of customs field formations may be issued.

5. Receipt of this Circular may please be acknowledged.

R.K. Talajia
Officer on Special Duty (DBK)

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