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EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME

Chapter 5 - Procedure - Foreign Trade Procedure - DGFT - 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 concerned shall, on the basis of nexus certificate from an Independen .....

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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 justification for seeking such amendment(s) along with fresh nexus .....

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orization 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 the certificate by a maximum period of 12 months with a composition .....

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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 under subparagraphs (a) (iii) and (iv) of paragraph 5.01 of FTP shall .....

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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 of EOU/ Relocated SEZ Units to DTA Unit under EPCG Scheme (a) An EOU .....

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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, then the average export obligation in respect of the authorisations .....

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e 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 along with application or during the validity period of EPCG Autho .....

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r. 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 export through a third party, export documents viz., shipping bills / .....

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d 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 e .....

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r & 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 the statement of exports, were manufactured by the license holder. .....

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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 EO against EPCG Authorisations within valid EO Period (whether origi .....

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e, (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 from date of imports even in cases where export obligation has been fu .....

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port 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 pertaining to the block, the Authorization holder shall, within 3 .....

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(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 Obligation Authorisation holder shall submit to RA concerned by 30th .....

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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 concerned, as per its delegated powers, may allow enhancement in du .....

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t 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 of composition fee equal to 5% and 10% respectively of proportiona .....

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wever, 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 the year may be reduced proportionate to reduction in exports of tha .....

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e previous financial year, and the RAs shall refix the annual average EO for previous year accordingly for exporters in that sector / product group. 5.20 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 authorisations 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 .....

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s of the documents submitted by the authorisation holder towards evidence of EO fulfilment shall also be enclosed with the certificate. (c) RA shall process such applications ordinarily within 30 days. Shortcomings, if any, shall be pointed out in one go. All correspondence, thereafter, shall relate to these deficiencies only. Fresh correspondence, if necessary, shall be within 15 days. Once documents are complete, EO will be discharged within 30 days of receipt of complete documents /informatio .....

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to exit at his option. The authorisation holder will have the option to furnish valid duty credit scrips, issued under Chapter 3 or Chapter 5 of FTP, for payment of the Customs duty component. (b) Authorisation holder can also pay duty and interest suo-motu on the basis of self /own calculation as per the procedure specified in paragraph 4.50 of HBP. 5.24 Maintenance of Records Every EPCG authorisation holder shall maintain, for a period of 2 years from date of redemption, a true and proper acc .....

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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 .....

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isions of FTP/HBP, Customs Act, 1962, as amended from time to time or any other law in force. 5.27 Clubbing of EPCG authorisations (a) Clubbing of two or more EPCG authorisations issued to the same authorisation holder would be permitted. (b) An application for clubbing can be made to RA concerned in ANF 5C. Clubbing shall only be permitted in case export products endorsed on the authorisations are same /similar and if authorisations are issued by the same RA. (c) Total export obligation would b .....

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cluding extended period, if any. However, clubbing in case of all authorisations where EO period is over may be allowed for regularisation purposes provided they have been issued under same policy period. (g) In case of clubbing of EPCG authorizations where EO can be fulfilled by export of alternate product(s)/service(s), the proportion of alternate product(s)/service(s) for EO fulfilment / regularization will be restricted to the lowest of the percentage of alternate product(s) / service(s) all .....

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G Authorisations issued between Notification of HBP 2015-20 till the Notification 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) N .....

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