Export Promotion Capital Goods (EPCG) Scheme - A brief Analysis

The EPCG Scheme of Export Promotion of Capital Goods Scheme was intended to promote the export of goods and services with the aim of increasing exports. This is given In the Foreign Trade Policy which is currently under 2015-2020.

There are 2 types of EPCG Authorization:

a)      Pre-Import of Capital Goods: allows import of capital goods for pre-production, production, and post-production at Zero customs duty except those capital goods which are specifically excluded.

b)      Post-Import of Capital Goods: in the form of duty credit scrips can be obtained from the department and such scrips either can be utilized for payment of customs duty on the import of goods or can be sold in the open market.

The procedure of EPCG Application:

  • Application to the Regional Authority (Head/Branch/Regional Office) from a Chartered Certified Engineer in Appendix 5A.
  • Nexus Certification from the (CEC)
  • Copy of certification to the Authority
  • Authorization for Import with a list of items along with application to the RA.
  • List of Items for Export and application for the amendment/justification from CEC to RA with valid Export Obligation Timeline.
  • Application for confirmation of installed goods for Regional Authority
  • Confirmation from the Authority regarding the Installation of goods
  • Certificate for Installation of Goods from CEC
  • In case spares are imported and installed, the certificate is needed along with Plant/Machinery with spares required.
  • EPCG authorization with a single port of registration will be issued.

      

Documents required for EPCG License

The issuing authority is also the licensing authority here which is – the Director General of Foreign Trade (DGFT). Self-certified copies of the following must be attached with ANF5B:

  • Import Export Code (IEC)
  • Registration cum Membership Certificate (RCMC)
  • Digital signature (DSC Certificate)
  • Registration certificate from Tourism Department
  • Pan Card
  • Excise Registration (if registered)
  • GST Registration Certificate
  • Proforma Invoice
  • Brochure
  • Self-Certified Copy + Original of Certificate of Chartered Accountant
  • Self-Certified Copy + Original of Certificate of Chartered Engineer
  • Nexus Certificate from Chartered Engineer ANF5A
  • Appendix 32A
  • Certificate of Installation (Post-Installation) 

Conditions for EPCG:

Ø  Export Obligation:

a)      Import under EPCG Scheme shall be subject to an export obligation equivalent to 6 times of duties, taxes & cess saved on capital goods, to be fulfilled in 6 years counted from the date of issuing of Authorisation.

b)      Export Obligation (EO) should be fulfilled in the following manner:

The period from the date of issue of Authorisation

Minimum export to be fulfilled obligation

Block of 1st to 4th year

50%

Block of 5th & 6th year

Balance Export Obligation  

 

How ASC will help you?

Ø  Evaluation of eligibility of Capital goods for the EPCG Scheme

Ø  Preparation & filing of application along with required certificate & documents

Ø  Representation of the clients & liaising with the Department for providing clarifications & obtaining EPCG Authorisation from the Authority.

Ø  Redemption of EPCG Authorisation on completion of Export Obligation of every year & every block.

Location: India

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