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EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME

Chapter 5 - Procedure - Foreign Trade Procedure - Foreign Trade Procedure 2015-2020 (From 5-12-2017 to 31-3-2020) Revised - Chapter 5 - CHAPTER 5 5.01 Policy Policy relating to EPCG Scheme is given in Chapter 5 of FTP. 5.02 Application Form An application for grant of an authorisation may be made by Registered Office or Head Office or a Branch Office or Manufacturing Unit of an eligible exporter to RA concerned in ANF 5A along with documents prescribed therein. 5.03 Nexus Certification (a) RA co .....

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the domain of his/her competence. (b) RA shall thereafter forward a copy of the 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 .....

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ngineer. 5.04 Certificate of Installation of Capital Goods (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 Engineer, at the option of the authorisation holder, confirming installation of capital goods at factory/premises of authorization holder or his supporting manufacturer(s). The RA may allow one time extension of the said period for producing t .....

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n the case of import of spares, the installation certificate shall be submitted by the Authorization holder within a period of three years from the date of import. 5.05 Port of Registration EPCG Authorisation shall be issued with a single port of registration as per paragraph 4.37 of HBP, for imports. However, exports can be made from any port specified in paragraph 4.37 of HBP. 5.06 Import of spares, tools, refractories and catalysts (a) Applications for procurement of capital goods covered und .....

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ription of product to be exported and value of export obligation. (c) Authorisation holder shall maintain a register of stock & consumption of capital goods covered under sub-paragraphs (a) (iii) and (iv) of paragraph 5.01 of FTP imported under the scheme and at the time of final redemption of export obligation, 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 o .....

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. (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, t .....

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apital Goods would be imposed on the de-bonding unit shifting to the EPCG Scheme. 5.08 Sourcing of Capital Goods Manufactured Indigenously (a) EPCG authorisation holder intending to source capital goods manufactured indigenously shall make a request to the RA for invalidation of EPCG authorisation for direct import / issuance of Advance Release Order (ARO) for availing deemed export benefits as given in paragraph 7.03 of FTP read with paragraph 7.02(c) of HBP. (b) This request can be made either .....

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facture of capital goods to be supplied to EPCG authorisation holder. 5.10 Conditions for fulfilment of Export Obligation In addition to conditions in paragraph 5.04 of FTP, the following conditions shall also be applicable for fulfilment of export obligation: (a) Name of the supporting manufacturer as well as the exporter shall be indicated on export documents. (b) EPCG authorisation holder may export either directly or through third party(ies). (c) In case the Authorization Holder wants to exp .....

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stalled. 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 a .....

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b) Invoice duly incorporating the relevant EPCG authorization number & date at the time of dispatch in case the unit is not registered with Central Excise / GST. (iii) Lorry Receipt (LR) /Logistical evidence for transportation of goods from the premises of the authorization holder to the third party/port of export. (iv) An undertaking from the 3rd party on a stamp paper, declaring that the products exported for fulfillment of EO by them on behalf of the license holder as per details given in .....

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e realized in freely convertible currency except for deemed exports supplies under Chapter 7. Exports to SEZ units /Supplies to developers/ co-developers irrespective of currency of realization, would also be counted for discharge of Export Obligation. Realization in case of supplies to SEZ units shall be from foreign currency account of the SEZ unit. 5.12 Calculation of Average Export Obligation While calculating Average Export Obligation, exports counted/being counted for fulfilling specific E .....

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ulture, (vi) Animal husbandry, (vii) Floriculture & Horticulture, (viii) Poultry, (ix) Viticulture, (x) Sericulture, (xi) Carpets, (xii) Coir, and (xiii) Jute (b) However, this exemption from maintenance of average export obligation 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-paragraph (a) above, shall not be allowed to be transferred for a period of five years fro .....

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r 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. (c) Where EO of the first block is not fulfilled in terms of the above proportions, except in 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 proportionate to unfulfilled portion of EO .....

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2013 shall be governed by provisions of paragraph 5.8 of HBP Vol. 1 (RE-12) as amended till 17.04.2013. (iii) Authorisations issued from 18th April, 2013 till issue of Notification of FTP 2015-20 shall be governed by provisions of paragraph 5.8 of HBP Vol. 1 as amended vide PN No. 1 dated 18.04.2013. (iv) Authorisations issued from 1st April, 2015 till 4th December 2017 shall be governed by provisions of paragraph 5.14 of HBP as amended vide PN No. 1 dated 01.04.2015. 5.15 Monitoring of Export O .....

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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 effected, in terms of duty saved amount, to RA concerned, within one month of excess imports taking place. Export obligation shall automatically stand enhanced proportionately. (b) in excess of duty saved amount indicated on the authorization by more than 10%, the RA .....

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to Notification of FTP 2015-20 RE 2017 shall be governed by relevant provisions of HBP applicable on the date of issue of authorisation. (b) Extension in Export Obligation Period of EPCG authorization issued prior to Notification of FTP 2015-20 shall be governed by relevant provisions of HBP Vol 1 applicable on the date of issue of authorization. (c) In case of zero duty EPCG Authorizations, two extensions of one year each in export obligation period may be considered by RA concerned, on payment .....

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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. 5.18 Provision for Units under BIFR/Rehabilitation (a) Deleted (b) Deleted 5.19 Relief in Average Export Obligation (a) 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 t .....

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yed 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. 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 a .....

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fee. Authorisation holder would not be required to maintain average E.O. as well for the ban period. 5.21 Deleted 5.22 Redemption (a) Authorisation holder shall apply for redemption 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 authorisation holder and forward a copy to Customs Authorities with whom BG/LUT has been executed. A statement giving details of the doc .....

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cations that remain outstanding beyond a period of 60 days after receipt of complete documents shall be reported to the EPCG Division at DGFT headquarters alongwith reasons thereof. 5.23 Regularization of Bonafide Default and Exit from EPCG Scheme (a) In case, EPCG authorisation holder fails to fulfil prescribed export obligation, he shall pay Customs Duty along with applicable interest as prescribed by Customs Authority. Such facility can also be availed by EPCG authorisation holder to exit at .....

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rts/ supplies 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 otherwis .....

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te 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 shall be taken into account for re-fixation of the EO. 5.26 Penal Action In case of failure to fulfil export obligation or any other condition of authorisation, authorisation holder shall be liable for action under FT (D&R) Act, 1992, as amended, Orders and Rules made thereunder, provisions of FT .....

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aking into account total of duty saved amount of the clubbed authorisations. (d) On Clubbing, authorisations for all purpose shall be deemed to be a single EPCG authorisation. Export obligation period for clubbed authorisations shall be reckoned from first authorisation issue-date. (e) Average export obligation for clubbed authorisations would be highest of average export obligations endorsed on individual authorisations so clubbed. (f) Clubbing would be permitted during valid EOP including exte .....

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clubbed authorizations. (h) EPCG authorisations issued prior to 1.4.2007 shall be governed by provisions contained in Chapter 5 of HBP Vol.1 (RE-2006). The EPCG Authorisations issued between 01.04.2007 and 17.04.2013 shall be governed by provisions contained in Chapter 5 of HBP Vol.1 (RE2012, as amended). The EPCG Authorisations issued from 18.04.2013 till the issue of Notification of HBP 2015-20 shall be governed by provisions contained in Public Notice No.1 dated 18.4.2013. The EPCG Authorisat .....

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ts 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 cer .....

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