Attention is invited to Para 5.3 of Export import policy 1997-2002(as amended up to 31.3.99), Para 5.29 and Para 5.30 of Handbook of Procedure Vol. I - 1997-2002 (as amended up to 31.3-99). As per the provisions contained therein, Import of second hand capital goods is Restricted and subject to import licencing procedures. Applications for such licences are considered by the Inter- Ministerial Restricted Items Licensing Committee in the DGFT, New Delhi.

It is clarified that "The Committee" will be considering such applications in the following manner:

1. Capital goods not older than 5 years: The Committee will normally allow import of such capital goods automatically.

2. Capital goods older than 5 years but less than 10 years: The Committee will be taking into consideration the comparative advantages/benefits of such imports vis-à-vis new capital goods.

3. Capital goods older than 10 years: Import of such capital goods will normally not be allowed except for heavy equipment In the infrastructure and core sector industries.

4. The imported capital goods will have to conform to the acceptable environmental and industrial safety, norms. Apart from the criteria mentioned above, the Committee may fix any other criteria as it may deem necessary.

In view of the problems faced by importers who had taken substantive steps for import of second hand capital goods before 31.3.99 or under special circumstances as mentioned below, the import of second hand capital goods may be allowed by the Committee even if they do not conform, to the guidelines as prescribed in Para 2 above:

1. Cases where following substantive steps taken prior to 31-03-1999,such as:

   1. Part/full payment for the import made.

   2. Orders for import negotiated/finalized

   3. Firm Commitments for import, such as forward contracts etc. have been made.

   4. Payment for dismantling of capital goods had been made.

2. Automobile manufacturers who have signed an MOU with the DGFT undertaking certain obligations like foreign equity participation, indigenisation and export obligation.

3. Cases where EPCG Committee took a decision to grant second hand EPCG licences before 31.3.1999 but licence could not be issued. in such cases applicants shall have the option of converting their EPCG applications Into restricted import licence applications and for that they may submit only a revised application in Appendix 8 of the Handbook of Procedures.

Future applicants for Import of second hand capital goods are advised to take into consideration the criteria as prescribed above before filing the applications. This issues with the approval of Director General of Foreign Trade.

(Issued from File No. 01/89/180 00076 AM 00)

Notification No. 92/99 dated 15-07-99 regarding exemption from additional duty of 10% on zero duty EPCG imports by the software industry.

EPCG additional duty nil for software industry.

The additional duty of 10% on zero duty EPCG imports has been exempted for software industry. The value flow for import is. Already pgged at Rs.10 lakhs. In other words, all machinery againt hey EPCG licence for software industry is now at nil duty. AppD(p.1046) In exercise of the powers conferred by sub-section Ntfn 92 (1) of section 25 of the Customs Act, 1962 (52 of 15.07.99 1962), the Central Government, being satisfied that 302 it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 29/97-Customs, dated the 1st April, 1997, namely:- In the said notification, - in paragraph 1, in the proviso, in clause (i), for the words "and marine products, or ", the words; "marine products and software, or " shall be substituted.