Capital Goods Sourced from SEZ Treated as ‘Imported Goods’ DGFT Clarification

[DGFT Policy Circular No. 65 dated 18th May 2012]

Subject: Treatment of Capital Goods sourced from SEZ and import of spares for such Capital Goods under EPCG Scheme – Para 5.2A of FTP– reg.

Kind attention is invited to Policy Circular No. 54 dated 23.02.2012. A question has arisen whether the Capital Goods sourced from Special Economic Zone (SEZ) would be treated as ‘imported goods’ and whether spares for such Capital Goods may be imported under the EPCG Scheme – Para 5.2A of FTP.

2.  The matter has been examined and it is clarified that Capital Goods sourced from SEZ are treated as ‘imported goods’. Hence, EPCG Scheme-under Para 5.2A is available for import of spares for such imported Capital Goods (i.e. sourced from SEZ) with reduced EO.  Besides this, EPCG Authorization for “Spares” is also allowed under Para 5.2 {as clarified in Policy Circular No. 12 dated 17.01.2011 (Point No. 2)}.

3.  This issues with the approval of Director General of Foreign Trade.