| 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) The Specific Export Obligation is the actual export obligation to be fulfilled by an exporter for a specific license. 4. Average Export Obligation (AEO) (i) The Average Export Obligation is the average export turnover of the entity in the 3 preceding Financial Years. (ii) In addition to the SEO, the license holder has to fulfill the average export Obligation. 5. The EO should be fulfilled as follows: (i) to be fulfilled in 6 Years. (ii) 50% in 1st block (1 to 4 Years) (iii) 50% in 2nd block (5 to 6 Years) (iv) AEO has be fulfilled every year (v) SEO fulfillment is calculated only after fulfillment of yearly AEO. |
| 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 AddressRenewal 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. |
