17 February 2012
READ IN TOTALITY The EPCG scheme allows import of capital goods for pre production, production and post production at 3% Customs duty subject to an export obligation equivalent to 8 times of duty saved on capital goods imported to be fulfilled over a period of 8 years reckoned from the date of issuance of the authorisation. NOW READ THIS The cost of an itemof fixed asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to itsworking condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price. Examples of directly attributable costs are: (i) site preparation; (ii) initial delivery and handling costs; (iii) installation cost, such as special foundations for plant; and (iv) professional fees, for example fees of architects and engineers. there is no such interpretation of directly attributable cost. but examples are given and service charges paid for epcg for acquiring FA is no where associated with it. Further EPCG is acquired for reducing capital cost. i think this is a type of manufacturing exp not to be capitalized. other opinions are invited.
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