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Clarification on EPCG

Customs - Started By: - Kishan Barai - Dated:- 8-4-2016 Last Replied Date:- 10-4-2016 - Respected Sir, As per FTP 2015 Special 25% EO would be less if goods sourced from India Is it for capital goods or raw material used in machinery. If machinery is bought from India then how EPCG is beneficial as there would be no payment of Import duty. Please enlighten... - Reply By CS SANJAY MALHOTRA - The Reply = Dear Mr. Kishan, Benefit of reduced EO is applicable for sourcing of Capital Goods indigenousl .....

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in Invoice by the seller and the same may be claimed either as CENVAT or Refund of TED from office of DGFT. (Supplier to mention on Invoice Supplies under EPCG Licence & Invalidation letter No.....). Separate procedure is specified in case of refund of TED in FTP 2015-20 The above process holds goods when the party exports are substantial to cover Export Obligation. Secondly, to avoid accumulation of CENVAT, various Exporters follow EPCG scheme for domestic sourcing of CG. - Reply By surya .....

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Mr. Krishan,Custom Dept. has nothing to do with sourcing of Capital Goods indigenously. You have to apply Invalidation letter against EPCG with jurisdictional DGFT office and have to submit either Bond or BG (BG Exempted in case of Status Holder).If you fail to fulfill EO i.e. 6 times the duty saved within 6 years or extension taken if any, jurisdictional office has the powers to issue Demand Notice for recovery of Duty alongwith Interest & Penalty besides invoking the BG.Scrip issued is on .....

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a person gets a EPCG if he want to buy machine from INDIA ? Why he should fulfill Export Obligation even 25% Less? Actually he does not have to pay any import duty. You already said that 25% less EO is not for inputs of raw material. 2. I did not get your point Scrip issued is only EPCG and not for payment of TED then what is the benefit of EPCG with domestic sourcing,please help sir... - Reply By Ganeshan Kalyani - The Reply = I guess Sri Kishan ji is questioning only to make this forum / onloo .....

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m aware but the above 2 points create following confusion1. Is 25% less EO applicable for machinery or raw material source indigenously ?2. People opt for EPCG only for..... Final products are exclusively exempt from Payment of Duty, as a result of which sourcing Capital goods from domestic sources adds to their Capital Cost. Hence, they prefer sourcing under EPCG with Invalidation letter in favour of domestic supplier of CG. Buyer can claim the benefit of TED (Terminal Excise Duty) i.e. refund .....

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urce indigenously ?? - Reply By MUKUND THAKKAR - The Reply = Dear Is 25% less EO applicable for machinery ? Applicable in case of Machinery not against Raw material. please read chapter 4 and chapter 5 of FTP 2015-20 . you will getting clearity. - Reply By Kishan Barai - The Reply = Thanks a lot sir, now I got it. - Reply By KASTURI SETHI - The Reply = Sh.Kishan Barai Ji, I have a great regard for your humbleness and thirst for learning more. This reminds of Sachin Tendulkar's humbleness who .....

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