Government should have strict norms for used capital goods

 
The inspection, supervision and administration of the imported second-hand capital goods should conform to the local rules on safety, environmental and labour protection, the chamber said in a note to the government.

“It is also important that while formulating such rules, clarity is provided on various terms used interchangeably in this regard like second-hand, used, refurbished, recycled, repaired etc.,” it said.

Unbridled import of used equipment undermines the domestic capacities with the possibility of reduced employment in the sector, the chamber said.

“Proliferation of used equipment can and have in the past adversely affected and delayed critical projects of national importance...,” it said. It further said many a times, import of used equipment is done through dubious activity such as under invoicing of the asset and wrong declaration of equipment age.

Countries like China and Australia have separate rules for imports of second-hand capital goods.

Ideas mooted

The chamber has suggested that the age of the machines should not be more than five years.

It also suggested pre-shipment inspection for used machinery before the equipment is loaded onto ships for shipment at the ports of departure.

“Customs duty applicable on import of second-hand machinery should be at least 25 to 30 per cent higher than the rate applicable to new machinery,” it said.

Besides, value of the second-hand capital goods being imported should be certified by an appropriate authority, it also stated.