Import relief for road developers

They won't need certification from Road Ministry or NHAI for availing customs duty exemption for specified goods

The government has eased the norms for Customs duty exemption on equipment for road developers. Now, road developers will not require certification from the road ministry or National Highways Authority of India (NHAI) for availing Customs duty exemption on specified goods.

And, if the developers sell the equipment within five years, they will have to pay Customs duty on the depreciated value of the equipment, according to the Budget announced by Finance Minister Arun Jaitley on Thursday.

M Murali, director general, National Highway Builders Federation, said developers were not able to sell the machinery that came for projects funded by multilateral agencies like the World Bank or the Asian Development Bank, as there was a clause that after the use, one can't sell the machinery. “All that machinery have become scrap now; machines over 30 years old have also been lying unused in warehouses. Now, developers can sell the machines in the open market without paying any customs duty,” Murali said.

ROAD AHEAD

• 152 Number of projects, worth Rs 1.50 lakh  crore, awarded under PPP mode during 2009-14
• Rs 28,881 cr Budgetary support for the current financial year to the road and highways sector, an increase of about 13.48%
• Rs 37,881 cr  Total Plan outlay, including internal and extra budgetary resources of Rs 9,000 crore, for 2014-15
• 8,500 km Construction target for 2014-15

The notification in the Budget said road construction machinery that is imported duty-free can be sold within five years of import, subject to payment of customs duty on depreciated value. Also, individual constituents of the consortium whose names appear in the contract can import goods without paying duty. Construction equipment attracts customs duty ranging from nil to 10 per cent.

Also, developers will not require certification from the road ministry or NHAI for availing Customs duty exemption on specified goods. Murali is of the view there has to be some authority for providing such certification.

Budget 2014-15 has put the road sector on a fast track. The budgetary support to the road and highways sector increased by about 13.48 per cent to Rs 28,881 crore for the current financial year. The total plan outlay stands at Rs 37,881 crore, including an IEBR (internal and extra budgetary resource) of Rs 9,000 crore for 2014-15, according to the Budget documents.

"During the current financial year, a target of NH (national highway) construction of 8,500 km will be achieved,” Jaitley said in his Budget speech on Thursday. The government will also initiate work on select expressways parallel to the development of industrial corridors. Rs 500 crore has been set aside for NHAI for project preparation.