The used capital goods i.e., Machinery, buildings, equipment, vehicles and tools are allowed freely to import or export in India as per the custom tariff heading and restrictions if any on such goods functionality, on payment of applicable custom duty and on concessional rate of custom duty under EPCG (Export Promotional Capital Goods) licence issued by DGFT (Director General of Foreign Trade) India.

The used capital goods imported in India must carry the Chartered Engineer certificate from who are authorised by the DGFT India, this certificate can be issued by such authorised C.E.’s on preload inspection basis at load port or after arrival of shipment at destination.
The inspection report helps to understand the conditions and current market valuation of such imported capital goods to depreciate for assessment and collection of the custom duty by Custom Authorities.
How to Calculate the Current market Value: –
The current market value of used capital goods depends on the below points.
i. Year of manufacturing, make and model no.
ii. Cost in the year and at the time of manufacturing for new machines.
iii. Any reconditioning/repairing/reprocessing of goods, present working conditions
iv. Remaining life of goods on the basis of its present condition.
What is depreciation and how to calculate it: –
The depreciation is the process of decreasing or calculation the value of used capital goods compare to its new model cost and its life of manufacturing.
The government of India has defined the below method to calculate and depreciate the cost of used capital goods/machinery.
For 1st year from manufacturing date 4% per quarter of new product cost (total 16%)
For 2nd year from manufacturing date 3% per quarter of new product cost (total 12%)
For 3rd year from manufacturing date 2.5% per quarter of new product cost (total 10%)
For 4th year from manufacturing date to onwards 2% per quarter of new product cost (total 8%)
Please be noted that the such depreciations are allowed only at the maximum of 70% of new machine/goods cost. The cost calculated in such method are FOB cost of imported used capital goods and any sea/air freight and insurance will be additional for assessment by custom.