EPCG

EPCG For Manufacturers

EPCG Scheme allows import of capital goods for preproduction, production and post-production at Zero customs duty.

Alternatively, the Authorisation holder may also procure Capital Goods from indigenous sources.Import of capital goods shall be subject to Actual User condition till export obligation is completed.

DEFINITION OF CAPITAL GOODS
Capital goods for the purpose of the EPCG scheme shall include:
  1. Any plant,machinery,equipment or accessories required for manufacture or production,either directly or indirectly ,of goods or rendering services,including those required for replacement,modernization,technological upgradation or expansion.It includes packaging machinery and equipment,refrigeration equipment,power generating sets,machine tools equipment and instruments for testing,research and development ,quality and pollution control.Capital goods may be for use in manufacturing,mining,agriculture,aquaculture,animal husbandry,floriculture,horticulture,pisciculture,poultry,sericulture and viticulture as well as use in services sector including in CKD/SKD condition thereof;
  2. Spares, moulds, dies, jigs, fixtures, tools & refractories for initial lining and spare refractories; and
  3. Catalysts for initial charge plus one subsequent charge.
WHO IS ELIGIBLE
EPCG scheme covers manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers. Name of supporting manufacturer(s) shall be endorsed on the EPCG authorisation before installation of the capital goods in the factory / premises of the supporting manufacturer (s).
BENEFITS
EXEMPTION FROM THE FOLLOWING DUTIES:
  1. Basic Customs Duty;
  2. Additional Duty under sus-sections (1),(3) and (5) of Section 3 of the Customs Tariff Act;
  3. IGST (available upto 31.03.2019)
EXPORT OBLIGATION
Export obligation equivalent to 6 times of duties saved on import of Capital Goods to be fulfilled in 6 years from the date of issue of the Authorisation.

EO shall be over and above the average level of exports achieved by the exporter in the preceding 3 licensing years .

To illustrate- An exporter imports Capital Goods under EPCG Scheme and saves duty of Rs.10 Crores.In previous three years he has exported 50 Crs.,100 Crs and 150 Crs.The Exporter fulfills the EO in 5 years.

EO to fulfill is 6 time duty saved= 60 Crores.

Average Export Performance is 50+100+150=300/3=100 Crores.

Total EO is 60 crores over and above AEP of Rs.500 crs (5 x 100)

INCENTIVE for early EO fulfillment
With a view to accelerating exports, in cases where Authorisation holder has fulfilled 75% or more of specific export obligation and 100% of Average Export Obligation till date, if any, in half or less than half the original export obligation period specified, remaining export obligation shall be condoned and the Authorisation redeemed by RA concerned.
EPCG For Merchants

EPCG scheme covers merchant exporters tied to supporting manufacturer(s)

Name of supporting manufacturer(s) shall be endorsed on the EPCG authorisation before installation of the capital goods in the factory / premises of the supporting manufacturer (s).

In case of any change in supporting manufacturer (s) the RA shall intimate such change to jurisdictional Central Excise Authority of existing as well as changed supporting manufacturer (s) and the Customs at port of registration of Authorisation.

With a view to accelerating exports, in cases where Authorisation holder has fulfilled 75% or more of specific export obligation and 100% of Average Export Obligation till date, if any, in half or less than half the original export obligation period specified, remaining export obligation shall be condoned and the Authorisation redeemed by RA concerned.

EPCG For Service Providers

EPCG scheme covers service providers. Name of Service provider(s) shall be endorsed on the EPCG authorization before installation of the capital goods in the premises.

Import of capital goods shall be subject to Actual User condition till export obligation is completed.

EO shall be fulfilled by the authorization holder through export of goods which are services rendered by him, for which the EPCG authorization has been granted.

Payment received in rupee terms for Services as notified in Appendix 3E shall also be counted towards discharge of export obligation under the EPCG scheme.

Testimonials

Fronius India Private LimitedXX-XX-XXXX
Dear Mr. Santosh Rane
Greetings from Fronius India!
We are glad to inform you that we have successfully concluded the Year 2016 by achieving our Budget. When we look back, it brings in lot of smile & sense of Pride! J . I take this opportunity to thank you for all the smart work and dedication…
Fronius India Pvt. Ltd.XX-XX-XXXX
Dear Mr. Mali,
This is to inform you that one shipment which landed in India today afternoon at 2.07 PM, got cleared from customs by your team at 5.50 PM.

We appreciate the efforts put in and great co-ordination by your import team – Mr. Sanjay/Mr. Shailendra/Ms Vrushali to clear the shipment with…

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