TMI BlogEXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEMEX X X X Extracts X X X X X X X X Extracts X X X X ..... ar, the benefit of Status Holder Incentive Scheme under Paragraph 3.16 of FTP. All other provisions pertaining to the concessional 3% EPCG scheme under this Chapter, to the extent they are not inconsistent with the above provisions of zero duty EPCG scheme, shall be applicable to the zero duty scheme also. Application Form 5.2 An application for grant of an authorization may be made to RA concerned in ANF 5A along with documents prescribed therein. EPCG Authorization for Annual Requirement 5.2A The Authorization for Annual Requirement will be issued subject to the following conditions in addition to other terms and conditions governing the EPCG scheme:- (i) Authorizations shall be issued with a specific duty saved amount and corresponding export obligation. The applicant would be required to indicate export products proposed to be exported under the authorization. (ii) The authorization holder shall also be required to submit a Nexus Certificate from an independent Chartered Engineer (CEC) in Appendix 32A, to the Customs authorities at the time of clearance of imported capital goods. A copy of the CEC shall be submitted to the concerned Regional Authority alongwit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of export obligation as per FTP. (ii) Further, at time of final redemption of export obligation, authorization holder shall submit certificate from Independent Chartered Engineer confirming use of spares, tools, spare refractories and catalyst so imported in the installed capital goods on the basis of stock consumption register maintained by authorization holder. EPCG Scheme to resultant DTA Unit from conversion of EOU/ Relocated SEZ Units 5.4 An EOU/ a relocated SEZ unit, while converting to a DTA Unit, may apply for an EPCG authorization in ANF alongwith documents prescribed therein. 'No Objection Certificate' should be produced from concerned Development Commissioner. Indigenous Sourcing of Capital goods 5.5 EPCG authorization holder intending to source capital goods indigenously, either alongwith application or after issuance of EPCG authorization, shall request to RA for invalidation of EPCG authorization for direct import/ issue of ARO, alongwith name and address of source person of the capital goods. 5.5.1 RA concerned will issue such invalidation letter/ARO, in duplicate. 5.5.2 Indigenous manufacturer intending to supply capital goods to EPCG authoriz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culture, aqua-culture (including fisheries), animal husbandry, floriculture, horticulture, pisciculture, viticulture, poultry and sericulture, the EPCG authorization holders shall not be required to maintain average level of exports. However, this exemption from maintenance of average level of exports shall not be allowed for import of fishing trawlers, boats, ships and other similar items. Goods, excepting tools imported under EPCG scheme by such sectors, shall not be allowed to be transferred for a period of five years from date of imports even in cases where export obligation has been fulfilled. Transfer of capital goods to group companies, within five years from the date of import would however be permitted after fulfillment of EO, under intimation to RA and jurisdictional Central Excise Authority. 5.8 The Authorization holder under the EPCG scheme shall fulfill the export obligation over the specified period in the following proportions: For Zero Duty EPCG Scheme Period from the date of issue of Authorization Minimum export Obligation to be fulfilled Block of 1st to 4th year 50% Block of 5th and 6th year 50% For concessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion holder shall submit to RA concerned by 30th April of every year, report on fulfillment of export obligation. RA concerned may issue partial EO fulfillment certificate, provided export performance is proportionately adequate to fulfillment of export obligation. Automatic Reduction/Enhancement upto 10% of CIF value and prorata Reduction/ Enhancement in export obligation. 5.10 If authorization issued has actually been utilized for import of a value in excess, upto 10% of CIF value /duty saved amount of authorization, authorization shall be deemed to have been enhanced by that proportion. Customs shall automatically allow clearance of goods in excess, upto 10% of authorization value/duty saved amount, without endorsement by concerned RA In such case, authorization holder shall furnish additional fee to cover excess imports effected, in terms of CIF value/duty saved amount, to RA concerned, within one month of excess imports taking place. Export obligation shall automatically stand enhanced proportionately. In case of utilization being more than 10%, concerned RA as per their financial powers, may endorse as per extant provisions. Authorization holder shall furnish additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/ state authority. 5.11.2 To provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5% as compared to the previous year, average export obligation for the year may be reduced proportionate to reduction in exports of that particular sector/product group during the relevant year as against the preceding year. However, in case export decline is continuous over consecutive years, the base year for calculation of eligibility and calculation of reduction in average export obligation will be taken as the year after which the exports have shown continuous decline. The sectors /product groups for which this relaxation is to be allowed shall be conveyed by the DGFT to all the RAs within seven months of the end of the previous financial year, and the RAs shall re-fix the annual average EO for previous year accordingly, for exporters in that sector / product group. Automatic EO extension in the event of ban on export product 5.11.3 Whenever a ban/restriction is imposed on export of any product, export obligation period in respect of EPCG authorizations already issued prior to imposition of ban on such export products, wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refixed. Replacement of Capital Goods 5.16.1 Capital Goods imported and found defective or otherwise unfit for use may be exported, and Capital Goods in replacement thereof be imported under EPCG scheme. In such cases, while allowing export, the Customs shall credit the duty benefit availed which can be debited again at the time of import of such replaced Capital Goods. Penal Action 5.17 In case of failure to fulfill export obligation or any other condition of authorization, authorization holder shall be liable for action under FT (D R) Act, 1992, Orders and Rules made thereunder, provisions of FTP and Customs Act, 1962. Clubbing of EPCG authorization 5.18 Clubbing of two or more EPCG authorizations of same authorization holder would be permitted. 5.18.1 An application for clubbing can be made only to RA concerned in ANF5D. Clubbing shall not be permitted in case authorizations are issued by different RAs. 5.18.2 Total export obligation would be refixed taking into account total of duty saved or total of CIF value of imports. 5.18.3 On Clubbing, authorizations for all purpose shall be deemed to be a single EPCG authorization. Export obligation period for cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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