GOVERNMENT OF INDIA
MINISTRY OF COMMERCE AND INDUSTRY
DEPARTMENT OF COMMERCE
MEPZ SPECIAL ECONOMIC ZONE
CHENNAI 600 045.
No. MEPZ/SEZ Rules/2006-IA1 Dt. 16/01/2008
Sub: Procurement of used capital goods from DTA by SEZ Units.
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To streamline the procedure of movement of used/second hand capital goods from Domestic Tariff Area into SEZ and to ensure that the value limit of used/second hand plant/machinery transferred from DTA into the SEZ does not exceed twenty percent of the total value of the plant/machinery installed in the Zone the following instructions are issued for the guidance of the units in the SEZs under the administrative control of Development Commissioner, MEPZ for strict compliance.
(i) The units intending to move second hand capital goods in DTA should furnish details as prescribed in the enclosed annexure and must obtain prior approval of the Development Commissioner before such movement. No such goods will be allowed into the Zone before prior approval.
(ii) No unit will be permitted to transfer/purchase second hand capital goods in DTA, before the expiry of six months from the date of commencement of commercial production. However if new capital goods have been installed they may transfer used/second hand capital goods in keeping with (i)
(iii) While computing the value of the used/second hand capital goods sought to be transferred into the zone, the depreciation rates stipulated by the CBEC in Notification 52/2003-Cus in respect of 100% EOU units will be adopted for arriving at the depreciated value of such second hand capital goods intended to be moved into the Zone.
(iv) For computing the value of capital goods already installed in the zone, their depreciated value as provided in rule 49 of SEZ rules 2006 will be taken into account.
(v) It should be ensured by the unit that the sum total of S. No. 5 & 6 of the enclosed annexure shall not exceed 20% of the sum total of S. Nos 3 & 4 of the annexure at any given point of time.
(vi) For each transfer of used/second hand capital goods from the DTA into the zone the unit has to compute the values as mentioned above and indicate at the relevant S. Nos of the enclosed annexure.
(vii) The details of such procurement of used/second hand Capital goods from DTA (including from an EOU, EHTP/STP/BTP unit) should be clearly mentioned in the Annual Performance Report submitted by the unit.
(viii) The limitation of 20% of the value of used/capital goods Capital goods that can move into the zone would not be applicable when such capital goods were originally imported by SEZ unit and have been taken out of the zone under the SEZ Rules 2006.
The procedure as mentioned above is applicable even in the case of movement of duty paid used/second hand capital goods from DTA. Any deviation from this procedure will attract penal action against the unit.
sd/- (C.R. Kalavathy)
Asst.Development Commissioner
for Developmetn Commissioner
To
All units/Developers
1) All Authorized Officers
2) Specified Officer
3) ADC II / ADC - III
ANNEXURE
Application for procurement of used capital goods from DTA (including from an EOU/EHTP/STP/BTP unit)
(1) Name of the unit :
(2) Date of Commencement of :
Commercial production
(3) Value of the installed Capital goods :
(Imported) (New & second hand)
(4) Value of the installed Capital goods :
(Procured from DTA) (New)
(5) Value of the installed Capital goods :
(Procured from DTA) (second hand)
(6) Value of the Capital Goods :
proposed to be procured from
DTA - (used/second hand)
We hereby declare that this procurement of the above mentioned second hand capital goods is strictly in terms of the provisions of sub-section (4) of section 10AA read with explanation 1 & 2 to sub-section (4) of section 10AA read with explanation 1 & 2 to sub-section (3) of section 80 IA of the Income Tax Act 1981.
SIGNATURE OF THE UNITS
AUTHORISED SIGNATORY