Imports of second-hand machinery more than five years old or above 5 years but less than 10 years will require a licence which will be issued by the inter-ministerial restricted items licensing committee in the DGFT. Licensing will also apply to machinery older than 10 years, DGFT sources clarified.

Whether imports of machinery will be against special import licence (SIL), about which there has been no mention in the guidelines, the sources further clarified that any import licence issued by DGFT would be against SIL only. On fears about delays in issuing the licences, sources said the committee meets every three weeks and clears 100 applications in each sitting. "Thus, the three-week period is reasonable," sources maintain.

While imports of second-hand machinery not older thanfive years will be permitted automatically, those for machinery more than 10 years old will normally not be allowed except for heavy equipment in the infrastructure and core sector industries.

In the past, the utility of an imported second-hand machinery used to be determined on its residual life and exporters were able to obtain certification from agencies without tears.

While the guidelines are silent on the issue, it is understood that the customs department at the time of delivery of a second-hand machinery will insist on the exporter concerned to produce a certificate from the manufacturer who has supplied it about the exact date of manufacture. The ban on imports of second-hand capital goods under the zero duty and the 10 per cent duty export promotion capital goods scheme will continue, sources clarify. However, imports of such goods effected before the ban came into force prior to March 31, will be allowed under these schemes, they add.

In addition, the guidelines will not apply to exporters whohad paid part or full payment for import of second-hand capital goods and to those who had negotiated or finalised orders for imports. Automobile giants which have signed an MoU with DGFT for setting up passenger car units in the country will also be outside the ambit of the guidelines. Earlier, second-hand machinery could be imported by AUs without a licence. The restriction was that only those machinery which were of a specified age limit and which had a minimum residual life could be imported.