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Computation of Plant and Machinery
(For calculating investment limit)

In calculating the value of plant and machinery, the original price thereof irrespective of whether the plant and machinery are new or second hand, shall be taken into account. However, to determine the price of second hand imported machinery, the original vale of the said plant and machinery will be taken in foreign currency terms. The value of foreign currency will be converted into rupee using the "current" exchange rate, i.e. exchange rate prevalent at the time of import. The import duty will be added on the basis of "current" rate of import duty, i.e. the rate of import duty prevalent at the time of import.

In calculating the value of plant and machinery, the following shall be excluded, namely:-

1. Cost of equipments such as tools, jigs, dies, moulds and spare parts for maintenance and the cost of consumable stores.
2. Cost of installation of plant and machinery.
3. Cost of Research and Development (R&D) equipment and pollution control equipment.
4. Cost of generation sets, extra transformers, etc., installed by the undertaking as per the regulations of the State Electricity Board.
5. Bank charges and service charges paid to the National Small Industries Corporation or the State Small Industries Corporation.
6. Cost involved in procurement or installation of cables, wiring, bus bars, electrical control panels (not those mounted on individual machines), oil circuit breaker/miniature circuit breakers, etc. which are necessarily to be used for providing electrical power to the plant and machinery safety measures.
7. Cost of gas producer plants.
8. Transportation charges (excluding taxes e.g., Sales tax, excise, etc.) for indigenous machinery from the place of manufacturing to the site of the factory.
9. Charges paid for technical know-how or erection of plant and machinery.
10. Cost of such storage tanks which store raw materials, finished products only and are not linked with the manufacturing process.
11. Cost of fire-fighting equipments.
12. Cost of those items of plant and machinery installed purely for power generation using non-conventional energy sources such as wind, solar energy, ocean waves, bio-gas etc.

In case of imported machinery, the following shall be included in calculating the value namely:-

1. Import duty, excluding miscellaneous expenses such as transportation from the port to the site of the factory, demurrage paid at the port.
2. Shipping charges
3. Customs clearance charges and
4. Sales tax