SEZ SET TO BE ALLOWED TO IMPORT USED MACHINERY, PLANTS

The Government has decided to allow Special Economic Zone (SEZ) units to import used plant or machinery without any quantitative restrictions, provided the machinery was not used by the assessee (unit owner) or previously used in India. SEZ units will also be allowed to use second-hand machinery and plant previously owned by the assessee or used in the country to the extent of 20% of the total value of machinery or plant used in the business. Earlier, SEZs were not allowed to use old machinery and plants at all. As per amendments in SEZ rules notifi ed recently, Rule 18(4)(g) prohibiting SEZ units to install previously used machinery has been deleted. The Finance Act 2007 amended Section 10AA of the Income Tax Act allowing SEZ units using up to 20% of used machinery for IT benefits.