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TMI BlogAmendment in Chapter 5 pertaining to Export Promotion Capital Goods (EPCG) Scheme of the Hand Book of Procedure (Volume I)X X X X Extracts X X X X X X X X Extracts X X X X ..... 14/P-5) CHAPTER 5 EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME 5.1 Policy Policy relating to Zero Duty EPCG Scheme is given in Chapter 5 of FTP. 5.2 Application Form An application for grant of an authorization should be made to RA concerned in ANF 5A along with documents prescribed therein. 5.2A EPCG Authorization for Annual Requirement The Authorization for Annual Requirement will be issued subject to the following conditions in addition to other terms and conditions governing the EPCG scheme:- (a) 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. (b) 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (a) Separate Authorisation shall be issued in case application is filed under Para 5.2A of FTP. 5.4 EPCG Scheme for conversion of EOU/Relocated SEZ Units to DTA Unit 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. 5.5 Indigenous Sourcing of Capital Goods (a) EPCG authorization holder intending to source capital goods indigenously shall request to RA for invalidating EPCG authorization for direct import / Issuance of ARO. (b) This request can be made either alongwith application or after issuance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, (v) Aqua-culture (including Fisheries), Pisciculture (vi) Animal husbandry, (vii) Floriculture & Horticulture, (viii) Poultry, (ix) Viticulture, (x) Sericulture, (xi) Carpets, (xii) Coir, and (xiii) Jute the EPCG authorization holders shall not be required to maintain average level of exports. (b) 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. (c) Goods, excepting tools imported under EPCG scheme by sectors specified in sub-para (a) above, 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. However, transfer of capital goods to group 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods in excess, upto 10% of authorization value/duty saved amount, without endorsement by concerned RA. (b)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. (c) 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 additional BG/LUT to the customs authority. 5.10.1 Similarly, if EPCG authorization holder 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (b) 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. 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 maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 5.17 Penal Action 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. 5.18 Clubbing of EPCG authorization Clubbing of two or more EPCG authorizations issued w.e.f 18.04.2013 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EO fulfilled. (f) The computation of freely transferable Duty Credit Scrip(s) will be based on basic customs duty amount paid. (g) Where the exporter has obtained EPCG authorisation under Para 5.22 (c) of HBP v1, declaring that he shall not avail CENVAT Credit, the Export Obligation shall be fixed with reference to the basic customs duty paid. In such cases Duty Credit Scrip will be issued based on the certificate from Central Excise regarding non-availment of CENVAT credit. Such certificate from central excise 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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