- March 31, 2024
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| SI No | Registrations / Licenses | Compliance |
| 1 | Product Title | Export Promotion Capital Goods (EPCG) |
| 2 | Legal framework | Chapter 5 of Foreign Trade Policy |
| 3 | Regulatory Body | Directorate General of Foreign Trade (DGFT) |
| 4 | Insight / Objective | To facilitate import of capital goods for producing quality goods and services and enhance India’s manufacturing competitiveness.
An authorization(License) is issued by DGFT and the same has to be registered with customs for import of capital goods without payment of Customs Duty. A Bank Guarantee has to be provided against such license to the quantum of 15% on DSV for manufacturer export and Service Provider will be 100%. |
| 5 | Categories / Types | 0% EPCG Scheme 3% EPCG Scheme – This is not in existence for fresh obtainments 5% EPCG Scheme – This is not in existence for fresh obtainments |
| 6 | Benefits / Obligation | Benefits: Import of Capital Goods without payment of Customs Duty and the customs Duty benefit availed is called Duty Saved Value (DSV)Obligations: 1. The entities which has availed EPCG Benfit has to export goods made out of the imported machinery to the quantum as specified and this quantum is termed as Export Obligation. 2. There are 2 types of export obligations whxih a license holder has to fulfill they are Specific EXport Obligation (SEO) and Average Export Obligation (AEO) 3. Specific Export Obligation (SEO) 4. Average Export Obligation (AEO) (ii) In addition to the SEO, the license holder has to fulfill the average export Obligation. 5. The EO should be fulfilled as follows: |
| 7 | Applicability / Eligibility | Applicability: 1. Applicable to Importers of Capital Goods* for pre-production, production and post-production, whose a notified quantum of finished good / services are intended to export.2. Applicable to buyers procuring Capital Goods in DTA for pre-production, production and post-production, whose a notified quantum of finished good / services are intended to export. *Capital Goods are defined in the Chapter 9 Eligibility: 1. Eligible Categories of business operators are Manufacture Exporter, Merchant Exporter, Service Provider. 2. Eligible list of capital goods are defined in chapter 9 and Ineligible list is defined in Appendix-5F. |
| 8 | Validity | Import Validity Within 24 months from the date of issue of AuthorizationLicense Validity Actual Validity of license is 6 Years and can be extended to another 2 years |
| 9 | Forms / Due Dates | Export Obligation (i) The Export Obligation to be fulfilled in 6 Years.(ii) The first blook i.e. 50% of SEO to be fulfilled within first 4 years from the license date. if not fulfilled within the said timelines the first block period can be extended to further 2 years (i.e. 4Years + 2 Years = 6 Years) (iii) The second block i.e. 50% in 2nd block within 6 Years from the License date. (iv) AEO has be fulfilled every year (v) SEO fulfillment is calculated only after fulfillment of yearly AEO. |
| 10 | Amendments / Renewal / Surrender | Amendments EPCG license can be amended for any of the following reasons: 1. Change in Export Products 2. Change of import item values and quantities before import 3. Change of Factory Address Renewal There is no option for renewal of license. However a license holder can apply for extension of EO Periods by paying nominal fee.Surrender If a license holder withdraws their decision of importing the capital goods at any time before importing can surrender the EPCG license. |
| 11 | Government Fee | ₹ 1 per 1000 of Duty Saved Value subject (Min ₹ 500/- & Max ₹ 1,00,000/- on CIF value / DSV of Authorization) |
| 12 | Penalty for Non-Compliance / Other Provisions / Guidelines | In case the Export Obligation is not fulfilled within the prescribed time, then the proportionate unfulfilled duty saved value has to be paid along with interest notified time to time |
| 13 | Guidelines / Other Provisions | Capital Goods means: (i) Capital Goods are defined in Chapter 9 (ii) Computer systems and software which are a part of the Capital Goods (iii) Spares, moulds, dies, jigs, fixtures, tools & refractories (iv) Catalysts for initial charge plus one subsequent charge (v) Import of capital goods for Project Imports notified by Central Board of Excise and Customs is also permitted under EPCG Scheme.Post Import Compliance: A certificate within 6 months from date of completion of import to RA, from the jurisdictional Customs authority or an independent Chartered Engineer, at the option of applicant confirming installation of CG at factory/premises of applicant or his supporting manufacturer(s) One time extension of the said period for producing the certificate by a maximum period of 12 months with a composition fee of Rs. 5000/-Spares, the installation certificate shall be submitted by within a period of 3 years from the date of import. |
| 14 | Checklist | 1. IEC 2. RCMC 3. Udyog Aadhar / IEM 4. Proforma Invoices 5. Catalogues 6. CE-Civil Certificate – Stating Nexus between Machinery and Output (Appendix-5A) 7. CA Certificate (Appendix-5B) 8. GST(If Available) |
| 15 | Venn Timelines | 7 to 10 Working days |
| 16 | Any Other Information | Port Registration: After obtainment of License applicant need to register the same with Customs manually. |
FAQ
Who can benefit from the EPCG Scheme?
Manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service provider(s); and service providers. Refer FTP and HBP for latest details.
If my IEC is in DEL/cancelled/suspended, am I eligible to apply for the EPCG authorisation?
If your IEC is in DEL, you shall be allowed to proceed with submission of your request for issuance of an EPCG authorisation, however, your application shall only be actioned upon once your IEC is removed from DEL. If your IEC is cancelled/suspended, you shall not be allowed to proceed with submission of your request for the issuance of an EPCG authorisation.
How do I fulfill export obligation under EPCG?
You can export either directly or through third party(s). Export proceeds are to be realized in freely convertible currency except for deemed exports. Import of capital goods imported under the EPCG scheme shall be subject to Actual user condition, until the export obligation is completed.
What is Post Export EPCG Duty Credit Scrip?
Post Export EPCG Duty Credit scrip(s) shall be available to exporters who intend to import capital goods on full payment of applicable duties, taxes and cess in cash and choose to opt for this scheme. • The basic customs duty paid on capital goods are remitted in the form of freely transferable duty credit scrip(s) under this scheme. This scrip shall be similar to that issued under Chapter 3 of FTP. • Specific export obligation shall be 85% of the applicable specific export obligation under the EPCG scheme. However, the average export obligation shall remain unchanged. • The duty remission shall be in proportion to the EO fulfilled. • All provisions for utilization of the duty credit scrip(s) shall be applicable to Post Export EPCG Duty Credit Scrip(s) as under Chapter 3 of FTP. • All provisions of the existing EPCG scheme shall apply in so far as they are not inconsistent with this scheme.
What in case I fail to complete my export obligation? OR What shall happen incase I default on my export obligation?
In case you fail to fulfil the prescribed export obligation, you shall pay duties of Customs plus interest proportionate to the unfulfilled value as prescribed by Customs authority. For more details on the process of submission of the application for closure with the option of Regularisation, please refer to the user manual.
Why is selecting a sector classification of Capital Goods sought to be imported mandatory? What to enter in the Justification for sector classification field?
You must choose the Sector Classification of the Capital Goods Sought to be imported as applicable to you for import under the EPCG scheme. Based on this sector, you may be given either of the below benefits: • Exemption from the maintenance of the annual average export obligation • A reduced specific export obligation The field Justification of Sector Classification must contain the justification of why you think the Sector of Capital Goods sought to be imported is classified under the selected sector.
When and how to use the feature of bulk upload for uploading of export items or import items?
A new feature of bulk upload has been introduced in the new system. This feature shall allow you to capture all the import and export items offline in a sample excel file, you shall only have to upload the file to update the details of import/export items. Please follow the below steps to use this feature: • In the import/export section, click on the button for Download Sample Excel. • The sample excel has been downloaded on your system. Fill the details of the items in that excel. • Once you have added details of all the items in the excel, click on the button for Bulk upload. • In the Upload Attachments section, click on Choose File to Upload and select the excel file that contains the details of items to be imported/exported. • Now click on the button Upload to upload the file. . The details in the file will now start to appear in the table below.
