New Guidelines for Depreciation on Capital Goods from FTZs to Domestic Areas; Refer Notification No. 57/94-C.E.

The circular issued by the Central Board of Excise and Customs outlines the method for calculating depreciation on capital goods when assessed for duty from Free Trade Zones or 100% Export Oriented Units to the Domestic Tariff Area. It refers to Notification No. 57/94-C.E., allowing such units to pay duty on the depreciated value of various equipment. The circular confirms that the depreciation method prescribed in Circular No. 305/52/85-FTT also applies to domestically procured capital goods. The depreciation rates are 4% per quarter in the first year, 3% in the second year, 2.5% in the third year, and 2% thereafter, with a maximum limit of 70%.

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