NEW DELHI: The government on Thursday extended concessional import benefits for equipment required in building cold storages, supply chains and front end operations - a move that will benefit companies like Reliance and Bharti which are expanding in the fast-growing retail sector.
The benefit of concessional imports under the Export Promotion Capital Goods Scheme would now be extended to retailers having a minimum area of 1,000 square metres, as per the annual supplement of Foreign Trade Policy announced here.
However, retailers availing the benefit would have to fulfill export obligation, which would be eight times of duty saved in eight years, the policy review said.
Government's move is expected to benefit big organised retailers such as Pantaloon, Hypercity and Reliance and the ones waiting to take off such as Bharti Retail.
Under EPCG, import of capital goods for pre-production, production and post-production, including completely knocked down and semi-knocked down units are allowed at 5 per cent customs duty. This is subject to an export obligation of eight times duty saved on import to be fulfilled in eight years.
Global chains like Wal-Mart and Metro have lined up their plans in India with huge investments in back-end infrastructure like cold storage, refrigerated vans, warehousing and material handling equipments.
Industry bodies have been asking the government to support the retail sector by giving concession of imports of goods such as material handling equipment, and other equipment required for warehousing and distribution facilities besides the capital goods.
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