Specified goods for Development of software for export. -exemptions
22-10-1991
Notification No. 140/91-Customs
In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central
Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in the Table
below (hereinafter referred to as the goods) when imported into India or procured from a Public Warehouse or a Private
Warehouse appointed or licensed, as the case may be, under section 57 or section 58 of the said Customs Act, or procured
from international exhibitions held in India, for the purpose of development of software, data entry and conversion, data
processing, data analysis and control data management or call centre services for export out of India ("hereinafter referred to
as said activities") by a Software Development Unit under the Software Technology Parks, under the Hundred Per cent Export
Oriented Scheme approved by the Inter-Ministerial Standing Committee for Hundred Per cent Export Oriented Units in the
Electronics Hardware Technology Parks (EHTP) and Software Technology Parks (STP) (hereinafter referred to as the
Standing Committee) appointed by the notification of the Government of India in the Ministry of Industry, Department of
Industrial Development, No. S.0.11(E), dated the 22nd February, 1993 from the whole of duty of customs leviable thereon under
the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty, if any, leviable thereon under section 3
of the second mentioned Act, subject to the following conditions, namely :-
(1)
the importer has been granted necessary licence for the
import of goods for the said purposes;
(2)
the importer carries out the said activities under customs
bond and subject to such other conditions as may be
specified by the Assistant Commissioner of Customs or
Deputy Commissioner of Customs in this behalf;
(3)
the importer exports out of India hundred per cent or such
other percentage as may fixed by the Standing
Committee, of software developed, data entry and
conversion done, data processed, data analysed and
controlled data management done or call centre services
rendered wholly or partly from the goods for the period
stipulated by the Standing Committee or such extended
period as may be specified by the Standing Committee;
(4)the importer agrees -
(a)
to bring the goods into the unit and
use them within the unit in
connection with the said activities
for export, using data
communication link or in the form of
physical export;
(b)
not to move the goods from the unit
without the approval of the Assistant
Commissioner of Customs or
Deputy Commissioner of Customs;
(c)
to export out of India all software
developed, data entry and
conversion done, data processed,
data analysed and controlled data
management done or call services
rendered in the unit;
(5)
the importer shall produce a certificate to the Assistant
Commissioner of Customs from the concerned Chief
Executive of the Software Technology Park Society set up
by the Government of India, Department of Electronics, to
the effect that the goods imported are to be installed or
used in the unit and that the import of such goods have
been authorised by the Standing Committee;
(6)
without predjudice to any other provisions contained in this
notification, the Assistant Commissioner of Customs or
Deputy Commissioner of Customs may, subject to such
conditions and limitations as he may deem fit to impose
under the circumstances of the case for the proper
safeguard of the revenue interest and also subject to such
permission of the Standing Committee where it is
exclusively required under the Export and Import Policy, as
herein after referred to in this condition, allow the said unit
to clear any of the said goods for being taken to any other
place in India in accordance with the Export and Import
Policy 1
st
April, 2002 - 31
st
March, 2007, published by
the Government of India in the Ministry of Commerce and
Industry, Notification No. 1/2002-07, dated 31
st
March,
2002, as amended from time to time (hereinafter in this
notification referred to as the said Export & Import Policy),
-
(a)
such clearance of capital goods,
material handling equipments, office
equipments and captive power
plants may be allowed on payment
of an amount equal to the customs
duty leviable on such goods on the
depreciated value thereof and at the
rate in force on the date of payment
of such duty;
"Provided that in the case of capital goods, the Assistant
commissioner of customs or deputy commissioner of
customs may, subject to such conditions as he may
specify, permit destruction of such capital goods without
payment of duty inside the unit , or outside the said unit,
where it is possible or permissible to destroy the same
within the said unit, in the presence of custom officer.
(b)
such clearance of goods (including
containers, suitable for repeated
use) other than those specified in
clause (a) may be allowed on
payment of customs duty on the
value at the time of import and at
rates in force on the date of
payment of such customs duty;
(c)
such clearance of used packing
materials such as cardboard boxes,
polythelene bags of a kind
unsuitable for repeated use may be
allowed without payment of any
customs duty;
Provided that the importer shall not be eligible to avail of
the exemption applicable to goods falling under heading
number 98.01 of the First Schedule to the Customs Tariff
Act, 1975 (51 of 1975), or the exemption available to the
imported goods under any Export Promotion scheme
other than the Export Promotion Capital Goods scheme
permitting import of capital goods at the rate of duty of
10% ad valorem in terms of notifications in force at the
time of debonding.
Explanation. - The depreciation in respect of goods
covered by clause (a) shall be allowed for the period from
the date of commencement of commercial production of
the unit or where such goods have been imported after
such commencement, from the date such goods have
come into use for commercial production upto the date of
payment of duty.
(7)
the importer executes a bond in such form and for such
sum and with such authority as may be prescribed by the
Assistant Commissioner of Customs or Deputy
Commissioner of Customs binding himself to fulfil the
export obligations and conditions stipulated in this
notification, and in or under the said Export and Import
Policy, as amended from time to time, and conditions for
establishment of Software Technology Parks of India for
software export as specified by the Department of
Electronics, and to pay on demand an amount equal to the
duty leviable on the goods and interest at the rate of fifteen
percent per annum on the said duty from the date of
importation or procurement of the said goods till the date
of payment of such duty, if -
(i)
in the case of capital goods, such
goods are not proved to the
satisfaction of the Assistant
Commissioner of Customs or
Deputy Commissioner of Customs
to have been found installed or
otherwise used within the bonded
premises or re-exported within a
period of one year from the date of
importation or procurement thereof
or within such extended period not
exceeding five years as the
Assistant Commis sioner of
Customs or Deputy Commissioner
of Customs may, on being satisfied
that there is sufficient cause for not
using them as above within the said
period, allow;
(ii)
in the case of goods other than
capital goods, such goods are not
proved to the satisfaction of the
Assistant Commissioner of
Customs or Deputy Commissioner
of Customs to have been used in
connection with the production or
packaging of goods for export out of
India or re-exported or cleared for
home consumption within a period
of one year from the date of
importation or procurement thereof
or within such extended period as
the Assistant Commissioner of
Customs or Deputy Commissioner
of Customs may, on being satisfied
that there is sufficient cause for not
using them as above; allow;
(iii) in the case of
(a)
goods produced or
packaged, such goods
have not been exported
out of India, and -
(b)
unused goods (including
containers, if any, suitable
for repeated use) as have
not been exported or
cleared for home
consumption, within a
period of one year from
the date of importation or
procurement of such
goods or within such
extended period as the
Assistant Commissioner
of Customs or Deputy
Commissioner of
Customs may, on being
satisfied that there is
sufficient cause for not
exporting such goods
within the said period,
allow;
(iv)
in the case of raw materials,
components, spares and
consumables (other than capital
goods) imported or procured duty
free, the unit fails to achieve Net
Foreign Exchange Earning as a
Percentage of Exports (NFEP) and
Export Performance (EP) as
specified in Appendix-1 of the said
Export and Import Policy, within one
year of importation or procurement
of such goods or within such,
extended period, not exceeding one
year, as the Assistant
Commissioner of Customs or
Deputy Commissioner of Customs
may, on being satisfied that there is
sufficient cause, allow.
Provided that the Commissioner of Customs may extend
the period for achievement of Net Foreign Exchange as a
Percent age of Exports (NFEP) or Export Performance
(EP) for further period not exceeding five years from the
date of importation or procurement;
(8)the procedure, as may be prescribed by the
Commissioner of Customs, is followed by such unit;
(9)
notwithstanding anything contained in this notification, the
exemption contained herein shall also apply to goods
which on importation into India are used for the
development of software, data entry and conversion, data
processing, data analysis and control , data management
or rendering of call centre services within the unit and such
software, data entry and conversion data processing, data
analysis and control , data management or call centre
services even if not exported out of India, are allowed to be
sold in India in physical form under and in accordance with
the said Import and Export Policy, as amended from time
to time, and in such quantity and subject to such limitations
and conditions as may be specified in this behalf by the
Standing Committee on payment of duty of excise leviable
on such software, data entry and conversion, data
processing, data analysis and control or data
management under section 3 of the Central Excise Act,
1944 (1 of 1944):
Provided that such sale of software, data entry and
conversion, data processing, data analysis and control
data management or call centre services shall be allowed
through data communication link or telecommunication link
subject to such conditions as may specified by the
Commissioner of Customs;
(10)
the Assistant Commissioner may, subject to the conditions
and limitations stipulated in the said Import and Export
Policy as amended from time to time, permit the goods
imported into India for the purpose aforesaid or, the
software developed, data entered and converted, data
processed, data analysed and controlled or data
management done to be taken temporarily outside the unit
without payment of duty, for repairs or display as the case
may be and the importer shall be bound to comply with
such conditions and limitations;
(11)
the Assistant Commissioner of Customs or Deputy
Commissioner of Customs may, as per procedure
specified by him allow a unit to re-export the goods
imported by it;
(12)
the telematic infrastructural equipments, if any, imported by
the importer may also be utilised for export by other units
engaged in the said activities
(13)
the Assistant Commissioner of Customs or Deputy
Commissioner of Customs may allow the supply/ transfer
of goods imported by a unit to another hundred per cent
export oriented undertaking or to a unit in the Export
Processing Zone/Free Trade Zone for the purpose of said
activities for export as per procedure specified by him in
this regard and necessary permission granted by the Chief
Executive of the Software Technology Park;
(14)
the Assistant Commissioner of Customs or Deputy
Commissioner of Custom may permit use of computer
system for training purpose (including commercial training)
subject to the condition that the unit had achieved
prescribed Net foreign exchange earning as percentage of
exports and that no computer terminal shall be installed
outside the bonded premises for the purpose.
(15)
the Assistant Commissioner of Customs or Deputy
Commissioner of Customs, subject to the approval of the
Commissioner of Customs, may allow diesel generating
sets/captive power plants, central air conditioning
equipments, uninterrupted power supply system,
networking equipments, data transfer protocol
equipments,EPABX, Fax, photocopier equipment and
security system imported by a unit to be utilized by other
Unit(s) under Software Technology Park Scheme
belonging to the owner of the importer Unit and located in
the same compound or near by/adjoining premises for the
purpose of said activities and export thereof.
16
The Assistant Commissioner of Customs or Deputy
Commissioner of Customs may allow the supply or
transfer of capital goods imported by a unit to another
hundred per cent export oriented undertaking or to a unit in
Export Processing Zone or Special Economic Zone or
Electronic Hardware Technology Parks or Software
Technology Park for use within the unit as per the
procedure specified by him in this behalf and subject to the
permission of the Chief Executive of the Software
Technology Park
2. Notwithstanding anything contained in paragraph 1, in the case of a unit engaged in the said activities the exemption
contained therein shall also apply to goods imported by such unit for any or all of the said purposes for export and for providing
consultancy services for any or all such activities on site abroad.
Provided that -
(a) the conditions stipulated in this notification are complied with by the said unit; and
(b) the procedure specified by the Commissioner of Customs is followed.
3. Without prejudice to other provisions of this notification, where the Assistant Commissioner or Deputy Commissioner of
Customs is satisfied that the unit, which has been permitted by the concerned State Electricity Board in this behalf, has been
permitted by Development Commissioner to sell into Domestic Tariff Area (DTA) or transfer to other hundred per cent. export
oriented undertaking or units in Export Processing Zone or Software Technology Park or Electronic Hardware Technology Park
or Special Economic Zone, the surplus power generated in its diesel generating sets or captive power plant subject to
fulfilment of such conditions as may be specified by the Assistant Commissioner or Deputy Commissioner of Customs on this
behalf, the Assistant Commissioner or Deputy Commissioner of Customs may allow the unit-
(i) to sell such surplus power in Domestic Tariff Area on payment of an amount equal to the duty leviable on consumables and
raw materials but for the exemption of duty thereon, used for generation of each unit of power so sold in the Domestic Tariff
Area on the basis of norms approved by the Board of Approvals appointed by the notification of the Government of India in the
Ministry of Commerce and Industry, Department of Commerce, number 14/1/2001-EPZ dated 7
th
August, 2001;
(ii) to transfer such surplus power to other hundred per cent. export oriented undertaking or unit in Export Processing Zone or
Software Technology Park or Electronic Hardware Technology Park or Special Economic Zone without payment of duty:
Provided that both supplying and receiving unit shall maintain account for the quantity of consumables and raw materials used
in generation of each unit of power so transferred as quantified on the basis of norms approved by the said Board of Approval,
for the purpose of calculation of Net Foreign Exchange earning as a Percentage of Export.
Explanation. - With effect from 13th August, 1993 the consultancy fees received by software development units in convertible
foreign currencies for consultancy services development of software, data entry and conversion, data processing, data analysis
and control or data management on site abroad shall be deemed to be exports for the purposes of fulfilment of export
obligation under the notification.
The Table
S.No. Description of goods
(1) (2)
1.Capital goods and accessories thereof;
2.Raw materials
3.Components.
4.Spares for production machinery.
5.Consumables required for manufacture of goods.
6.Drawings, blue prints, technical maps and charts relating to manufacturing activity.
7.
Office equipment including PABX, fax machine, video projection system, computer, laptop, server, spares, consumables
thereof.
8.
Captive power plants or diesel generating sets or transformers as recommended by the Chief Executive of the Software
Technology park Society/Designated Officer.
9.
Accessories, spares and consumables for goods at serial number 8 above as approved by the assistant commissioner
or deputy commissioner of customs.
10.
Uninterrupted power supply System(UPS), pollution control equipment , quality assurance equipment, storage systems,
special racks for storage, modular furniture, computer furniture, anti_static carpet, teleconfrence equipment, servo
control system, panels for electricals, air conditioners, security systems, networking equipments, data transfer protocol
equipment and central air-conditioning system equipments.
11.Spares and consumables for goods specified at serial number 10 above.
Notification No. 140/91-Cus., dated 22-10-1991 as amended by Notifications No. 154/93-Cus., dated 13-8-1993; No.
161/93-Cus., dated 16-8-1993; No. 110/94-Cus., dated 15-04-1994; No. 192/94-Cus., dated 6-12-1994; No. 83/95-Cus.,
dated 31-3-1995; No. 101/95-Cus., dated 26-5-1995; No. 117/95-Cus., dated 12-6-1995; No. 171/95-Cus., dated 26-12-
1995; No. 10/97-Cus., dated 17-2-1997;No. 33/97 Cus., dated 1-4-1997; No. 12/98-Cus., dated 27-4-1998; No. 65/99-Cus.,
dated 19-5-1999, No. 9/2000-Cus., dated 28-1-2000 and No. 71/2000-Cus., dated 22-5-2000 , notification No.106/2001-cus.
dt.10-10-2001., notification No. 64/2002-cus dated 24-6-2002.and No.65/2002-cus dated 25-6-2002.
