Valuation (Customs) of second-hand motor vehicles — Depreciation for - Customs - F. No. 495/16/93-Cus.VI

Valuation (Customs) of second-hand motor vehicles — Depreciation for F. No. 495/16/93-Cus.VI, dated 26-5-1993 Government of India Central Board of Excise Customs New Delhi Subject : Depreciation to be allowed for used motor vehicles imported into India Instructions - Review of - Regarding. The question of prescribing of fixed scale of depreciation to be allowed for valuation of imported second-hand motor vehicles has been under consideration of the Board. This was considered necessary so as to avoid disputes in the valuation of imported second-hand motor vehicles and subsequent delays in their clearance. 2. As per the existing Instructions, the scale of depreciation for old and used cars is as under : (i) for every quarter during the 1st year   - 4% (ii) for every quarter during the 2nd year    - 3% (iii) for every quarter during the 3rd year   - 2.50% (iv) for every quarter during the 4th year   - 2% If the motor vehicles are more than 4 years old, depreciation is allowed on merit after inspection of the motor vehicles, subject to a maximum limit of 70%. 3. In order to avoid possible disputes on the depreciation allowed on motor vehicles which are more than 4 years old, it has been decided by the Board that the scale of depreciation on used motor vehicles henceforth will be on the same basis as for the imported second-hand machinery. As such, the scale of depreciation for valuation of imported second-hand motor vehicles will be as under : (i) for every quarter during 1st year - 4% (ii) for every quarter during 2nd year - 3% (iii) for every quarter during 3rd year - 2.50% (iv) for every quarter during 4th year - 2% and thereafter subject to an overall limit of 70% 4. The above instructions may be brought to the notice of all Assessing Officers. The instructions will apply from the date of their issue and would apply to all pending assessment.