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,

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)

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