FICCI wants Rules for Import of second hand equipments
FICCI wants formulation of rules for the import of second hand equipments to strengthen and standardize the inspection, supervision and administration of importation of used machinery to safeguard the safety and quality of imported used machinery and the workers. In a note to the Government, FICCI has suggested some common principles that can be considered while formulating Rules for Import of second hand equipments
++ Pre-shipment inspection for used machinery before the imported machinery is loaded onto ships for shipment at the port of departure. The inspection and quarantine agency or pre-shipment inspection agency recognized by Indian authorities can conduct preliminary assessment of the safety, sanitation, environmental protection and other items of the used machinery in line with the compulsory requirements of technical standards of India.
++ Restriction on port of entry (like limiting the number of ports for importing second hand machinery for effective monitoring).
++ In general the age limit of 5 years for old machinery could be considered, with relaxations on need basis in sub-sectors where domestic capacity is insufficient.
++ Custom duty applicable on import of second hand machinery should be at least 25%-30% percent higher than the rate applicable to new machinery, depending on the sub-sectors.
++ Lower depreciation rate for used machinery vis-à-vis new machinery.
++ Value of the second hand capital goods being imported shall be certified by an appropriate authority of the country from where the good is being imported, by a recognized valuation authority.
++ Price of import not more than the written down value (WDV) of the machinery calculated based on Indian Rules (Income Tax Act) of depreciation. Value of used equipment may be assessed as derived from the original value of the equipment reduced by depreciation for the length of usage of equipment and customs duty should be levied on such value. The importer could be made to attach a copy of original Invoice of the proposed machine to the import request with a condition that the first invoice, in original, to be produced to Customs at the time of payment of duty to enable clearance from the port, failing which the importer will have to pay heavy penalty. This will help regulate import of used equipment to essential and genuine needs only.
++ Guaranteed availability of parts for the life of the used equipment.
++ Certificate/Affidavit from prior user about health/quality of operation during its operating life with him/her.