TMI BlogEXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEMEX X X X Extracts X X X X X X X X Extracts X X X X ..... e EPCG authorisation to the concerned Jurisdictional Customs Authority. The wastage so permitted at the time of issuance of authorisation would be allowed to be sold as scrap/waste on payment of applicable duty. (c) An application for amendment in the list of import item(s) including addition(s)/deletion(s), if any, may be filed with RA concerned provided the authorisation is valid for import. The applicant would give justification for seeking such amendment(s) along with fresh nexus certificate from an independent Chartered Engineer. (d) An application for amendment in the list of export item(s) including addition(s)/deletion(s) if any, may be filed with RA concerned provided the Export Obligation period of the authorisation is valid and the CG has nexus with export product. The applicant would give justification for seeking such amendment(s) along with fresh nexus certificate from an independent Chartered Engineer. 5.04 Certificate of Installation of Capital Goods 2 [ (a) Authorization holder shall produce, within six months from date of completion of import, to the concerned RA, a certificate from the jurisdictional Customs authority or an independent Chartered E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , authorization holder shall submit certificate from independent Chartered Engineer confirming their use in the installed capital goods on the basis of such register. 5.07 Conversion of EOU/ Relocated SEZ Units to DTA Unit under EPCG Scheme (a) An EOU/ a relocated SEZ unit, while converting to a DTA Unit, may apply for an EPCG authorisation along with documents prescribed. No Objection Certificate should be produced from the concerned Development Commissioner. (b) The export obligation period for a unit which converts from EOU / SEZ Scheme to EPCG Scheme would be the same as is available to a direct EPCG Authorisation Holder as per Paragraph 5.01 of Foreign Trade Policy (FTP). (c) If a standalone EOU / SEZ unit wishes to de-bond from EOU to EPCG Scheme, there shall be no requirement for maintenance of average export obligation and the unit shall be required to maintain only specific export obligation equivalent to six times of the proportionate duty saved amount of the depreciated value of capital goods for which the Authorisation has been obtained. (d) In case one unit of a firm / company opts to de-bond from EOU to EPCG Scheme, while other unit(s) are DTA units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufactured by the EPCG Authorisation Holder or the supporting manufacturer where the capital goods imported under the authorisation have been installed. Proceeds realised through normal banking channel from third party exporter s account to the authorisation holder s account on account of such exports only shall be counted towards fulfilment of export obligation. (d) The EPCG authorization holder shall submit the following additional documents for discharge of EO through third party (ies): (i) A copy of agreement entered into between the authorization holder and the ultimate exporter undertaking to export the goods manufactured by the authorization holder/supporting manufacturer for fulfilment of the export obligation against the EPCG authorization in question. (ii) Proof of having despatched the goods from authorization Holder s factory premises to the ultimate exporter/port of export viz. (a) ARE 1 certificate issued by Central Excise / Tax invoice for export prescribed under the GST rules with due authentication by the Customs verifying the exports along with the shipping bill number, date and EPCG authorization number or (b) Invoice duly incorporating the relevant EPC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Goods, excepting tools imported under EPCG scheme by sectors specified in sub-paragraph (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. 19 [ (d) For the years 2020-21 and 2021-22. no Average Export Obligation is required to be maintained for EPCG authorizations issued for Hotel, Healthcare and Educational sectors ] 5.14 Block-wise Fulfilment of EO (a) The Authorisation holder under the EPCG scheme shall, while maintaining the average export obligation, fulfill the specific export obligation over the prescribed block period in the following proportions: Period from the date of issue of Authorisation Minimum export obligation to be fulfilled Block of 1st to 4th year 50% Block of 5th and 6th year Balance EO 3 [ (b) The Authorisation 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. ] 9 [ (c) Request for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough online. Such a report shall contain details such as Shipping bill/GST invoice number, date of export/supply, description of product exported/supplied and FOB/FOR value of export/supply for both specific as well as average export obligation. Any delay in filing such an annual report shall be regularised on payment of ₹ 5000/- late fees for each financial year per authorisation. ] 16 [ 17 [ Time limit to file returns for the year 2022-23 is extended till 31.12.2022 ] . Late fees of Rs. 5000/- under this para is applicable for the returns due to be filed from the year 2022-23 onwards. ] 5.16 Automatic Reduction/ Enhancement upto 10% Duty saved amount and pro rata Reduction/ Enhancement in export obligation 4 [ If authorization issued has been utilized for import of goods: 11 [ (a) in excess of the duty saved amount indicated on the authorization by not more than 10%, the authorization shall be deemed to have been enhanced by that proportion. Customs shall automatically allow clearance of such goods without endorsement by RA concerned. The authorization holder shall furnish additional fee to cover excess imports affected, in terms of duty saved amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorisation, shall not be allowed by RA under this provision. ] 7 [ (e) However, for the authorisations covered under para 5.17 (a), (b) and (c), if the export obligation period expires during 1st February, 2020 to 31st July, 2020, such period is deemed to be automatically extended by further 6 months from the date of such expiry. ] 8 [ (f): a. For EPCG Authorisations, where original or extended Export Obligation (EO) period is expiring during the period between 01.08.2020 and 31.07.2021, the Export Obligation period would be extended till 31.12.2021 without any composition Fees. Ilowever this extension is subject to 5% additional export obligation in value terms (in free Foreign Exchange ) on the balance Export Obligation on the date of expiry of the original/extended export obligation period. b. The option to avail EO extensions with payment of composition fees under this para (5.17(c)) would remain available for these authorisations as per eligibility. c. In cases where EPCG Authorisation Holder has already obtained EO extension upon the payment of composition fee, the refund of the composition fee will not be permitted. ] 20 [ (g): i) For EPCG authoriza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared 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 refix the annual average EO for previous year accordingly for exporters in that sector / product group. 13 [5.19A - Maintenance of Annual Average Export Obligation The excess exports done towards the average export obligation fulfillment of an EPCG authorization during a year can be used to offset any shortfall in the Average EO done in other year(s) of the EO period or the block period as the case may be, provided Average EO imposed is maintained on an overall basis, within the EO period. ] 5.20 Automatic E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made and services rendered towards fulfilment of export obligation. 5.25 Re-Export / Repair/Replacement of Capital Goods Imported under EPCG Scheme (a) Capital Goods imported under EPCG scheme, which are found defective or unfit for use, may be re-exported to foreign supplier within three years from the date of clearance by Customs of such goods, with permission of RA / Customs Authority. Consequently, EO would be re-fixed. (b) Capital Goods imported and found defective or otherwise unfit for use may be exported, within two years from the date of clearance by Customs of such goods, with permission of RA / Customs Authority 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. (c) Capital Goods imported under EPCG scheme, may be re-exported for repairs abroad within three years from the date of clearance by Customs of such goods, with permission of RA / Customs Authority. The duty component on the expenditure incurred on the repairs as well as the insurance and the freight, both ways ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of HBP 2015-20 (RE 2017) shall be governed by provisions contained in HBP 2015-20. 5.28 Post Export EPCG Duty Credit Scrip(s) (a) Exporters can exercise this option by filing an application in ANF5A with the RA concerned by selecting the option for this Scheme. (b) All applicable duties shall be paid in cash by the exporter at the time of import of Capital Goods. (c) RA shall issue an Authorisation specifying (i) Not for imports on the body of the Authorisation; (ii) Average EO, if any; (iii) Specific EO @ 85% of the applicable specific EO, computed as if the imports were to take the benefit of duty exemption; and (iv) EOP, which shall commence from the Authorisation issue date. (d) Exporter can file request in ANF 5 B, for issuance of Duty Credit Scrip(s) in proportion to the EO completed within the specified EOP. Only for first such request, proof of actual duty payments on Capital Goods, nexus and installation certificate(s) of Capital Goods shall be submitted alongwith proof of fulfilment of EO alongwith proof of maintenance of Average EO. Subsequently, only proof of fulfilment of specific EO (alongwith proof of maintenance of Average EO) addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cing the certificate by a maximum period of 12 months with a composition fee of ₹ 5000/-. Where the authorisation holder opts for independent Chartered Engineer s certificate, he shall send a copy of the certificate to the jurisdictional Customs Authority for intimation/record. The authorization holder shall be permitted to shift capital goods during this period to other units mentioned in the IEC and RCMC of the authorization holder subject to production of fresh installation certificate. 3. Substituted vide Public Notice No. 32/2015-20 dated 29-08-2018 before it was read (b) The Authorisation 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. 4. Substituted vide Public Notice No. 22/2015-20 31-07-2019 before it was read as If authorization issued has been utilized for import of goods: (a) in excess of duty saved amount indicated on the authorization by not more than 10%, the authorization shall be deemed to have been enhanced by that proportion. Customs shall automatically allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort taking place, subject to payment of composition fee of ₹ 5000/- per authorisation. 12. Substituted vide PUBLIC NOTICE NO. 03/2015-2020 dated 13-04-2022 before it was read as, (d) Request for extension in EO Period shall be made to RA within 90 days from the date of expiry of original EO Period. However, RA may consider the request for extension received upto 180 days with additional composition fee of ₹ 5,000. 13. Substituted vide PUBLIC NOTICE NO. 03/2015-2020 dated 13-04-2022 before it was read as, 1 [5.19A : Maintenance of Annual Average Export Obligation The excess exports done towards the average export obligation fulfilment of an EPCG authorization during a year can be used to offset any shortfall in the Average EO done in other year(s) of the EO period or the block period as the case may be provided Average EO imposed is maintained on an overall basis, within the block period or the EO period as applicable] 14. Substituted vide PUBLIC NOTICE NO. 03/2015-2020 dated 13-04-2022 before it was read as, 5.22 Redemption (a) Authorisation holder shall apply for redemption in ANF 5B with documents prescribed therein as a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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