I am having a query regarding import of re-manufactured parts from the US. The cost of re-manufactured parts will be a fraction of new parts. For example: If a new cylinder liner cost $1500.00, the re-manufactured would cost $150.00. Please advise, (a) if there is some special procedure for import of re-manufactured parts (b) what will be the custom duty on re-manufactured parts.
According to Para 2.17 of the Foreign Trade Policy (FTP), all second-hand goods, except second-hand capital goods, shall be restricted for imports and may be imported only in accordance with provisions of FTP, Handbook of Procedures or public notice or an authorisation issued in this regard. The para specifically mentions that import of re-manufactured goods shall be allowed only against a licence.
The Director General of Foreign Trade (DGFT) has also issued Policy Circular no. 4/2006 dated April 20, 2006, clarifying that remanufactured goods are different from second-hand capital goods and that remanufactured goods are not allowed freely for import. Refurbished/reconditioned spares, however, can be imported freely on production of Chartered Engineer certificate that such spares have at least 80 per cent residual life of original spares.
Regarding valuation of goods, primacy has to be given for â transaction value i.e. the price paid or payable by the buyer. No specific instructions have been issued for re-manufactured goods. However, in my opinion, the Customs will apply the instructions contained in Central Board of Excise & Customs (CBEC) Circular no. 4/2008-Cus. dated February 8, 2008, which require the importer to submit a Chartered Engineer certificate giving the specified details. The value will be determined on the basis of the original year of manufacture, original purchase price, cost of reconditioning etc. by allowing depreciation at the specified rates. The rate of duty will depend on the classification of the item.
Normally, spares that are not parts of general use will be classified under the suitable sub-heading appropriate to the specific machine. Such parts will usually attract a basic customs duty of 7.5 per cent and the usual additional duties of customs and cess, the aggregate duty working out to about 23.89 per cent.
I want to take back with me (i.e. re-export) a car that I imported on duty payment, when I came to India. Can I get any duty back from the government?
According to the Customs notification no. 19/1965 dated February 6, 1965, you can get drawback of duty calculated by reducing the import duty paid in respect of such motor car by 4 per cent, 3 per cent, 2.5 per cent and 2 per cent for use for each quarter or part thereof during the period of first year, second year, third year and fourth year respectively.
However, you must note that where the period aforesaid is more than 2 years, drawback shall be allowed, only if the CBEC, on sufficient cause being shown, has in that particular case extended the period beyond 2 years and also that no drawback shall be allowed if such motor car has been used for more than 4 years.
