TMI BlogExport Promotion Capital Goods (EPCG) SchemeX X X X Extracts X X X X X X X X Extracts X X X X ..... thorisation would be allowed to be sold as scrap/waste on payment of applicable duty by the authorisation holder. (b) 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. (c) 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 (a) Authorisation 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/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 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, then the average export obligation in respect of the authorisations issued to the firm / company (other than de-bonding unit) shall remain unchanged and the average EO, after de-bonding of the unit, shall be fixed by excluding the exports made by the de-bonded unit from the total exports of the firm/ company, which runs concurrently for all the units of the firm/ compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ARO, in quadruplicate. (f) Validity period of invalidation letter/ARO shall be co-terminous with the validity period of EPCG authorisation. 5.10 Conditions for fulfillment of Export Obligation In addition to conditions in paragraph 5.04 of FTP, the following conditions shall also be applicable for fulfillment of export obligation: (a) Name of the supporting manufacturer as well as the exporter shall be indicated on export documents. (b) In case the Authorisation holder wants to export through a third party, export documents viz., shipping bills/Bill of exports etc. shall indicate name of both authorisation holder and supporting manufacturer, if any, along with EPCG authorisation number. Shipping bill/Bill of Export, GST invoice and e-BRC/ export realisation from RBI s EDPMS should be in the name of third party exporter. The goods exported through third party should be manufactured by the EPCG authorisation holder or the supporting manufacturer where the capital goods imported under the authorisation have been installed. The goods manufactured by the authorisation holder shall be exported as it is by the ultimate exporter (third party exporter) without further proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alculating Average Export Obligation, exports counted/being counted for fulfilling specific EO against EPCG Authorisations within valid EO Period (whether original or extended) that have been made in the preceding 3 years will not be taken into account. 5.13 Block-wise Fulfillment 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 (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. (c) Request for extension of Export Obligation period of first block shall be submitted within 6 months from the date of expiry of first block EO period along with composition fee of 2% on duty saved amount proportion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a late fee of Rs. 5000/- per year for each authorisation. 5.15 Automatic Reduction/Enhancement upto 10% Duty saved amount and pro rata Reduction/Enhancement in export obligation If authorisation issued has been utilized for import of goods:- (a) In excess of duty saved amount indicated on the authorisation by not more than 10%, the authorisation shall be deemed to have been enhanced by that proportion. Customs shall automatically allow clearance of such goods without endorsement by RA concerned. The authorisation holder shall furnish additional fee to cover excess imports effected, in terms of duty saved amount, to RA concerned, at the time of application for EODC. Export obligation shall automatically stand enhanced proportionately. (b) In excess of duty saved amount indicated on the authorisation by more than 10%, the RA concerned, as per its delegated powers, may allow enhancement in duty saved amount of the EPCG authorisation. The Authorisation holder shall furnish additional BG/LUT to the Customs Authority. (c) Less than the duty saved amount indicated on the authorisation, the export obligation shall stand reduced on pro-rata basis with reference to actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r accordingly for exporters in that sector/ product group. 5.18 Maintenance of Annual Average Export Obligation The excess exports done towards the average export obligation fulfilment of an EPCG authorisation 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. 5.19 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 composition fee. Authorisation holder would not be required to maintain average EO as well for the ban period. 5.20 Export Obligation Discharge Certificate (EODC) (a) Authorisation holder shall apply for online EODC in ANF 5B with documents prescribed therein as a proof of EO fulfillment. (b) On being satisfied, RA concerned shall issue EODC to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 shall be taken into account for re-fixation of the EO. 5.24 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 FTP/HBP, Customs Act, 1962, as amended from time to time or any other law in force. 5.25 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 au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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