Engg. Product Export Scheme - Modvat permitted on inputs - Spares Import allowed

Engineering Product Export Scheme amended allowing iron steel producers import maintenance spares up to 5% license value

The Engineering Product Export Scheme for replenishment of iron and steel intermediates was amended through customs notification. Key changes include: inputs imported against Value Based Advance Intermediate Licenses now attract additional customs duty, which can be claimed as Modvat credit on inputs used in manufacturing iron and steel intermediates. Iron and steel producers can import maintenance spares up to 5% of the license value subject to actual use conditions. Value-based licenses and imported inputs become freely transferable after fulfilling supply obligations and obtaining licensing authority endorsement. Supply from iron and steel producers to engineering exporters requires payment of normal excise duty. The amendments resulted from representations by engineering exporters and iron and steel producers, implemented in consultation with the Ministry of Commerce to facilitate the export scheme operations.