Government bans zero duty import of capital goods for power plants

NEW DELHI: The government today banned duty- free import of capital goods for power generation and transmission projects under the EPCG Scheme.

The decision is aimed at encouraging manufacturing of power equipment and giving a push to domestic capital goods sector, with an aim to boost the overall economy.

Amending the Foreign Trade Policy 2015-20, the Directorate General of Foreign Trade (DGFT) said in an order: "Authorisation under EPCG Scheme shall not be issued for import of any Capital Goods for generation/transmission of power (including Captive plants and Power Generator Sets of any kind)..."

The Export Promotion Capital Goods (EPCG) scheme allows import of capital goods for pre-production, production and post-production at zero custom duty.

The government has fixed a target of 88,537 MW power generation capacity addition for the 12th Plan period ending 2016-17.

Till December 2015, 72,240.12 MW or 81.59 per cent of the target has achieved, as per the Central Electricity Authority data.