No, as the input output norms take into account the wastage that may be generated during manufacturing process.
We are a SEZ unit and now want to exit the SEZ. We were advised to pay Basic customs duty of 5 per cent on all the capital goods being moved to Domestic Tariff Area (DTA). Is it correct, when all our capital goods were sourced locally? Also, our laptops are five years old and the book value is zero. We are still being asked to pay Basic Customs Duty @5 per cent and GST @18 per cent on them at 10 per cent of the original purchase price. Is this a valid imposition?
As per Rule 49 (3) of the SEZ Rules, 2006, goods on which any export entitlements were availed at the time of procurement of goods may be supplied back to the DTA on payment of duty equivalent to the export entitlements availed, subject to the condition that the identity of goods being supplied back to the DTA is established to the satisfaction of the Specified Officer. Provided that where no export entitlements are availed, such goods may be supplied back to the DTA without payment of duty. Secondly, as per Rule 74 (5) of the said Rules, for exit of the unit, depreciation norms for capital goods shall be as given in sub-rule (1) of Rule 49. As per Rule 49(1)(c) of the said Rules, depreciation shall be allowed in straight line method for computer and computer peripherals: for every quarter in the first year at the rate of 10 per cent, for every quarter in the second year at the rate of 8 per cent, for every quarter in the third year at the rate of 5 per cent and for every quarter in the fourth and fifth year at the rate of 1 per cent.