Valuation of second-hand machinery and fixing up scales of
depreciation
F. No. 493/124/86-Cus. VI, dated 4-1-1988
Government of India
Ministry of Finance (Department of Revenue)
New Delhi
Subject : Valuation of second-hand machinery and fixing up
scales of depreciation.
Attention is invited to Ministry’s instructions of even
number dated 19-11-1987 wherein rates of depreciation were fixed for the purpose
of arriving at the assessable value of second-hand machinery.
2. In para 3 of the above-mentioned letter, it was stated
that the depreciation will be calculated on the original value of the machinery
under import and that officers of the Customs Houses would have to determine the
original value of the machinery on the basis of the current c.i.f. value of the
machinery as shown in the certificate of the Chartered Engineer. In this regard,
it has been reported to the Board that a Chartered Engineer’s certificate
generally mentions the price of the new machinery and does not indicate clearly
as to whether this is the current price or it is the price of the new machine in
the year of its manufacture. Accordingly, where a certificate mentions the
current price of the new machinery only, the Customs Officers do not have
sufficient evidence to deduce the original value of the machinery as in its year
of manufacture.
3. It has accordingly been decided that where the Chartered
Engineer’s certificate does not specifically mention the price of the new
machinery as in its year of manufacture, the scale or depreciation should be
calculated on the basis of the price of the new machinery as declared in the
Chartered Engineer’s certificate without going into the question as to whether
this price pertains to the current c.i.f. price or the c.i.f. price in the year
of its manufacture. The earlier instructions dated 19-11-1987 are modified to
the above extent.