Electronic exports get more sops

NEW DELHI, April 13: To give a fillip to export of electronic items the Exim Policy for 1998-99 has reduced the threshold limit for zero dut...

NEW DELHI, April 13: To give a fillip to export of electronic items the Exim Policy for 1998-99 has reduced the threshold limit for zero duty Export Promotion Capital Goods EPCG scheme for the electronics industry to Rs 10 lakh from Rs 20 crore. In addition, the depreciation limit for the electronics industry has been increased to 90 per cent from 70 per cent over a period of five years. Announcing the scheme Union minister for commerce R K Hegde underscored that the government was committed to placing the electronics industry in a pre-eminent position.

Under the new EPCG scheme machinery for producing electronic items whose value is Rs 10 lakh and above will not attract any duty. The export obligation which comes with this scheme is six times the cost-insurance-freight CIF value of the machinery over a period of eight years if exports are calculated on a free-on-board basis. If the exports are calculated on a net-foreign-exchange basis, exports worth five times the CIF value of the machinery will haveto be made over the same period of eight years.

The minister also promised a 8220;special package so that India can emerge as a significant player in this sector.8221; Special schemes for human resource development in this field are also being finalised, Hegde said. A separate approach is necessary for this sector as it requires different systems and procedures to ensure easy import of inputs, he added. Electronics is an important sector which has not been developed adequately in the country and India is yet to exploit the vast potential in the world market, Hegde said.The bonding period for electronic hardware and software parks shall be five years. The period will be extended to 10 years in case of products requiring significant capital investment and infrastructure support. On completion of the bonding period it shall be open to the unit to continue under the scheme or opt out of the scheme.

On approval from the development commissioner technology parks can be debonded. Debonding will be subject to penalty.In addition, payment of customs and excise as applicable will have to be made.

Domestic Tariff Area DTA units can be given technology park status but no concession will be given with respect to plant machinery and equipment already installed. Existing DTA units having an export obligation under the EPCG scheme can also apply for conversion to technology park status. On such a conversion the export obligation under the EPCG scheme will be met concurrently from exports by the unit.