Procurement of Spares Beyond 5% by
Granite Sector EOUs - Clarification
[DGFT
Policy Circular No. 1 dated 12th October 2009]
Subject: Clarification to enable
procurement of spares beyond 5% by granite sector EOUs.
Para 6.7 (a) of HBP (04-09) {para 6.6(a) of HBP (09-14)} allows granite
sector to take spares up to 5% of the value of the Capital Goods to quarry
site. Representations were received from
EOUs in granite sector stating that some of the Customs Authorities apply the
5% limit in regard to procurement of spares also under Customs Notification
52/03.
2. The matter was taken up with
Department of Revenue, which has clarified vide OM DGEP/FTP/62/2009-EOU dated
12.8.2009 as under:
“EOUs in granite sector are
allowed to procure capital goods, which are required in connection with
processing and manufacture or production of articles of granite for export.
Besides these capital goods, these units are also allowed certain specified
quarrying equipments and spares up to 5% value of quarrying equipments in each
year. These quarrying equipments and spares are allowed to be taken to quarry
outside the unit. These quarrying equipments and spares are specified under
Annexure V of Notification No. 52/2003-Cus and 22/2003-CE both dated 31.3.03.
The capital goods and spares required in the EOU in connection with processing
and manufacture or production of articles of granite for export are specified
in Annexure I of the notification 52/2003-Cus.
Para 6.7 (a) of HBP v 1 {6.6(a)
of HBP (09-14)} puts restriction of removal of spares to 5% to quarrying
site. Thus spares allowed duty free for
quarrying need to be restricted to that level. However, there is no limit for the spares required for capital
goods for use within EOU.”
3. Accordingly, Department of
Revenue has clarified that there is no limit for spares required for capital goods
for use within the EOU.
4. This issues with the approval
of Director General of Foreign Trade