TMI BlogEXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEMEX X X X Extracts X X X X X X X X Extracts X X X X ..... the concerned Regional Authority alongwith copy of the bill of entry, within 30 days from the date of import of the Capital Goods. 5.3 Nexus Certification (a) RA concerned shall, on the basis of nexus certificate from an Independent Chartered Engineer (CEC) submitted by the applicant in Appendix 32A, issue EPCG authorization. Reasonable wastage, if any, anticipated at the time of installation of capital goods will also be certified by the Chartered Engineer in the nexus certificate and the same would be mentioned in the condition sheet of the EPCG authorization at the time of issue. (b) RA shall thereafter forward a copy of the EPCG authorization to the concerned Jurisdictional Central Excise Authority. The wastage so permitted at the time of issuance of authorization would be allowed to be sold on payment of applicable duty on sale of scrap/ waste. 5.3.1 (a) Authorization holder shall produce to the concerned RA a certificate from the Jurisdictional Central Excise Authority, confirming installation of Capital Goods at factory/ premises of authorization holder or his supporting manufacturer(s) /vendor(s) within six months from date of completion of import. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of EPCG authorization. (c) Applicant shall give the name and address of the 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 authorization holder may apply to RA in ANF for issuance of Advance authorization for import of inputs including components required for manufacture of capital goods to be supplied to EPCG authorization holder. 5.6 Sourcing of domestic Capital Goods on lease basis An EPCG authorization holder may, source capital goods from a domestic leasing company. In such cases, the Bill of Entry of imported capital goods or commercial invoice of indigenous capital goods, shall be signed jointly by EPCG authorization holder and leasing company. However, EPCG authorization holder shall alone be fully responsible for fulfilment of export obligation. 5.7 Conditions for fulfilment of Export Obligation In addition to conditions mentioned in paragraph 5.5 of FTP , following conditions shall also be applicable for fulfilment of export obligation: 5.7.1 (a) EPCG authorization holder shall export either directly or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p companies, within five years from the date of import would be permitted after fulfilment of EO, under intimation to RA and jurisdictional Central Excise Authority. 5.8 EO fulfilment blocks The Authorization holder under the EPCG scheme shall fulfill the export obligation over the specified period in the following proportions: Period from the date of issue of Authorization Minimum export obligation to be fulfilled Block of 1 st to 4 th year 50% Block of 5 th and 6 th year 50% 5.8.1 However, the EO of a particular block of year may be set off by the excess exports made in the preceding block year. The Authorization holder would intimate the regional authority on the fulfilment of the export obligation, as well as average exports, within three months of completion of the block, by secured electronic filing using digital signatures. 5.8.2 Where EO of the first block is not fulfilled in terms of the above proportions, (except in such cases where the EO prescribed for first block is extended by the Regional Authority subject to payment of composition fee of 2% on duty saved amount equal to unfulfilled po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has utilized authorization less than the value earmarked in authorization, his export obligation shall stand reduced on pro-rata basis with reference to actual utilization of authorization. 5.11 Extension of Export Obligation Period (a) In respect of EPCG authorizations (other than zero duty EPCG) issued upto 17.4.2013, concerned RA, may consider one or more requests for grant of extension in export obligation period, on payment of composition fee equal to 2% of proportionate duty saved amount on unfulfilled export obligation or an enhancement in export obligation imposed to the extent of 10% of total export obligation imposed under authorization, as the case may be, at the choice of exporter, for each year of extension sought. Such first extension in EO period can be for a maximum period of 2 years. (b) Extension in EO period beyond two years period available above, may be considered, for a further extension upto 2 years with a condition that 50% of duty payable in proportion to the unfulfilled export obligation is paid by authorization holder to Custom authorities before an endorsement of extension is made on EPCG authorization by RA concerned. In such cases, no compos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. 5.11.3 Automatic EO extension in the event of ban on export product 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, would stand automatically extended for a period equivalent to duration of such ban, without any composition fee and exporter would not be required to maintain average E.O. as well for the ban period. 5.12 Export Obligation Shortfall RA concerned may condone shortfall upto 5% in export obligation (specific EO) arising out of duty saved amount. 5.13 Redemption (a) Authorization holder shall furnish application in ANF 5B with documents prescribed therein as a proof of EO fulfilment. (b) On being satisfied, RA concerned shall issue a certificate of discharge of export obligation to the EPCG authorization holder and forward a copy to customs authorities with whom BG/LUT has been executed. (c) RA shall ensure disposal of such applications within 30 days. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.2013 to the same authorization holder would be permitted. 5.18.1 An application for clubbing can be made 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 re-fixed taking into account total of duty saved. 5.18.3 On Clubbing, authorizations for all purpose shall be deemed to be a single EPCG authorization. Export obligation period for clubbed authorization shall be reckoned from first authorization issue-date. 5.18.4 Average export obligation for clubbed authorizations would be highest of average export obligations endorsed on individual authorizations so clubbed. 5.18.5 No clubbing would be permitted after expiry of EOP. 5.18.6 The aforesaid provisions for Clubbing of EPCG Authorizations shall be applicable for authorizations issued on or after 18.04.2013. However, EPCG authorizations issued prior to 1.4.2007 shall be governed by provisions contained in Chapter 5 of HBP Vol.1 (RE-2006) . The EPCG Authorizations issued between 01.04.2007 and 17.04.2013 shall be governed by provisions contained in Chapter 5 of HBP v1 (RE-2012) . 5.19 Technological ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise regarding non-availing of CENVAT credit will not be required where the unit is not registered with central excise. (h) All provisions of the existing EPCG Scheme shall apply insofar as they are not inconsistent with this scheme. (i) The CG imported under para 5.11 of FTP shall not be disposed of till the date of last export for offsetting EO against such CG. (j) In case of re-export of CG found defective or unfit for use as per the provisions of para 5.16 of HBPv1 if the exporter claims drawback on such re-export there would be no remission of duty under para 5.11 of FTP 5.23 Green Technology Products (a) The Export Products covered under Para 5.10 of FTP are: (i) Equipment for Solar Energy decentralized and grid connected products, (ii) Bio-Mass Gassifier, (iii) Bio-Mass/Waste Boiler, (iv) Vapour Absorption Chillers, (v) Waste Heat Boiler, (vi) Waste Heat Recovery Units, (vii) Unfired Heat Recovery Steam Generators, (viii) Wind Turbine, (ix) Solar Collector and Parts thereof, (x) Water Treatment Plants, (xi) Wind Mill, Wind Mill Turbine / Engine, (xii) Other Generating Sets - Wind po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l cases where CVD portion is considered for grant of duty credit scrip, RA shall endorse the Bill of Entry(ies) to this effect, mentioning that CVD Portion shall not be Cenvatable and send a communication to the same jurisdictional Central Excise Authority informing the details along with relevant list of Bill of Entry(ies). (ii) Such certificate from Central Excise shall, however, not be required in case (a) the unit is not registered with Central Excise, or (b) the unit has opted out of Central Excise net or (c) the end product is not subject to Central Excise duty. 6. Inserted vide Public Notice No. 48/2009-2014 (RE-2012) Dated the 8 th February, 2013 . 7. Substitited vide PUBLIC NOTICE No.01(RE-2013)/ 2009-2014 dated 18-4-2013 , before it was read as, [CHAPTER 5 EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME 5.1 Policy Policy relating to (a) Zero Duty EPCG Scheme and (b) Concessional 3% Duty EPCG Scheme is given in Chapter 5 of FTP. 5.1A Exclusions under Zero Duty EPCG Scheme Deleted [Content shifted to FTP Para 5.1]. 5.2 Application Form An application for grant of an authorization may be made to RA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be issued with a single port of registration mentioned in paragraph 4.19 of HBP Vol. I for imports. However, exports can be made from any port specified in paragraph 4.19. 5.3.3 (a) An applicant may also apply for import of spares, tools, spare refractories and catalyst as are required for installation and maintenance of Capital Goods. Application shall contain list of plant/ machinery installed in factory/ premises of applicant for which spares, tools, spare refractories and catalyst are required, duly certified by Chartered Engineer or Jurisdictional Central Excise Authorities. In such cases EPCG authorization shall not specify list of spares but shall indicate: (i) Name of plant /machinery for which spares are required. (ii) Value of duty saved allowed under the authorization. (iii) Description of product to be exported with value of export obligation as per FTP. (b) 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 maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espective of currency of realization would also be counted for discharge of Export Obligation. 5.7.3 Supplies made to Oil and Gas sector also may be counted towards discharge of export obligation against an EPCG authorization provided it has been issued on or before 31.03.2000 and no benefit under paragraph 8.3 of FTP has been claimed on such supplies. 5.7.4 (a) Exports made to such countries as notified by DGFT, shall not be counted for fixing average level of exports. (b) Additional Export Obligation (over and above indicated average) for all previous EPCG Licenses, which have not been redeemed, will be indicated separately. (c) Exports made against EPCG authorizations, which have not been redeemed, shall not be added up for calculating the average export performance for the purpose of subsequent EPCG authorization. 5.7.5 Export under EPCG scheme shall also be entitled for benefits under Chapter 4 of FTP. 5.7.6 (a) In case of export of goods relating to: (i) Handicraft, (ii) Handlooms, (iii) Cottage Tiny sector, (iv) Agriculture, (v) Aqua-culture (including fisheries), Pisciculture, (vi) Animal husbandry, (vii) Floriculture Horticulture, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular block of years is extended by the Regional Authority subject to payment of composition fee of 2% on duty saved amount equal to unfulfilled portion of EO, such Authorization holder shall, within 3 months from the expiry of the block of years, pay duties of customs (alongwith applicable interest as notified by DOR) of an amount equal to that proportion of the duty leviable on the goods which bears the same proportion as the unfulfilled portion of the EO bears to the total EO. 5.8.4 (a) EPCG authorizations issued upto 31.03.2000 shall be governed by provisions laid down in paragraph 6.11 in HBP Vol.1 (RE-99). Notwithstanding the same in HBP Vol. 1 (RE-99), authorization holder shall not have to surrender special Import licence in case of value wise shortfall. (b) Authorizations issued from 1st April, 2000 upto 31st March, 2002 shall be governed by provisions of Chapter 6 of HBP Vol. 1 (RE-01) as amended from time to time. (c) Authorizations issued from 1st April, 2002 upto 31st August, 2004 shall be governed by provisions of para 5.8 of HBP Vol. 1 (RE-02) as amended from time to time. 5.9 Monitoring of Export Obligation Authorization holder shall submit to RA concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be paid or additional EO is to be imposed as prescribed in the Para above. In case the firm is still not able to complete the export obligation, duty already deposited will be deducted from total duty plus interest to be paid for EO default. (c) However for zero duty EPCG scheme only one extension of 2 years in export obligation period shall be available, subject to conditions mentioned above. (d) Extension in export obligation period shall also be subject to such terms and conditions as may be prescribed by competent authority. 5.11.1 (a) The firm /company, which is applying for registration with BIFR/Rehabilitation Department of State Government, shall also intimate DGFT with regard to relief sought for EPCG authorization, if any within 30 days of receipt of application by agency concerned. (b) DGFT, thereafter, shall take up the matter with agency concerned to safeguard government interest on account of default in fulfillment of export obligation imposed on EPCG authorization obtained by such firm/companies. (c) DGFT may consider such application for grant of period of extension upto 12 years, or as per rehabilitation package prepared by operating agency and app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of 90 days from date of receipt of initial request. Applications that remain outstanding beyond a period of 90 days shall be reported to DGFT alongwith reasons thereof, immediately thereafter. 5.14 Regularization of Bonafide Default In case, EPCG authorization holder fails to fulfil prescribed export obligation, he shall pay duties of Customs plus interest as prescribed by Customs authority. Such facilities can also be availed by EPCG authorization holder to exit at his option. The authorization holder will have the option to furnish valid duty credit scrips, issued under Chapter 3 of FTP DEPB, for payment of the customs duty component. 5.15 Maintenance of Records Every EPCG authorization holder shall maintain, for a period of 3 years from date of redemption, a true and proper account of exports/ supplies made and services rendered towards fulfillment of export obligation. 5.16 Re-Export of Capital Goods Imported under EPCG Scheme Capital Goods imported under EPCG scheme, which are found defective or unfit for use, may be re-exported back to foreign supplier within three years from the date of payment of duty on importation thereof, with permission of RA / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export obligation would be computed as under: (% export obligation unfulfilled) x (8) x (duty saved on authorization issue-date) (c) There would be no change in average export obligation fixed or export obligation period of original authorization. 5.20 Technological Upgradation of Capital Goods Application for technological upgradation of the capital goods would be made in ANF5A. 5.21 Import of Refurbished / Reconditioned Spares and Tools (a) Import of refurbished / reconditioned spares must have a residual life not less than 80% of life of original spare, which would be certified by EPCG authorization holder. (b) The tools imported under EPCG Scheme may be transferred to any of units or group companies of applicant. 5.22 Revalidation of authorization issued under EPCG scheme shall not be allowed. 5.23 Post Export EPCG Duty Credit Scrip(s) (a) Exporters can exercise this option by filing an application in ANF5A with the concerned RA, selecting an option for this Scheme. 2 [ (b) For importing Capital Goods, all applicable duties shall be paid in cash by the exporter. ] (c) RA shall issue an Authorization specifying (i) Not for imports on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
