Capital goods taken outside the Free Trade or Export Processing Zone or 100% EOUs - Calculation of depreciation - Customs - F. No. 305/52/85-FTT

Capital goods taken outside the Free Trade or Export Processing Zone or 100% EOUs - Calculation of depreciation F. No. 305/52/85-FTT Dated: 15-4-1987 Government of India Ministry of Finance Department of Revenue Central Board of Excise Customs, New Delhi Attention is invited to Notification No. 244/86-Cus., dated 14.4.1986, and to say that the question of laying down an appropriate method for calculating the depreciation that should be allowed to the 'capital goods', which are permitted to be taken outside the Free Trade Zone or Export Processing Zones or 100% Export Oriented Units to any other places in India on payment of duty leviable thereon has been under consideration of the Board. 2. It has been decided that the depreciation to such 'Capital Goods' at the time of assessment of duty while being taken outside the Free Trade or Export Processing Zones or 100% EOUs should be calculated at the depreciation rates presently in force for assessment of used cars. It has also been decided that for subsequent years after fourth year a flat rate of depreciation of 2% per every quarter may be provided for. The rates of depreciation for such goods, would be as follows :- For every quarter during 1st Year 4% For every quarter during 2nd Year 3% For every quarter during 3rd Year 2.5% For every quarter during 4th Year and thereafter 3% Subject to an overall limit of 90% 3. It may be clarified that under notification applicable to Free Trade or Export Processing Zones, depreciation is permitted only to such capital goods as have been used within the zone for a period of not less than 3 years. Similarly, in the case of 100% EOUs, depreciation is permitted only to such capital goods as have been used by the EOUs during the period of export obligation stipulated by the Board of approval. Accordingly, in the case of 100% EOUs, no depreciation would be permissible if the unit is being debonded without completing the period of export obligation in prescribed by the Board of Approval.