19 October 2010
In case export is made to Nepal/Bhutan and payment is received in foreign currency say dollar will it qualify for EPCG (i.e. export obligation under EPCG license).
19 October 2010
Why separate notification. It is covered under export. Export rebate can be obtained if export to Nepal is made (a) on payment of free convertible foreign exchange or (b)for specified capital goods to goverment of Nepal against global tender, even if payment is received in indian rupees.
However, above rule will not be applicable for Bhutan.
24 July 2024
Under the Export Promotion Capital Goods (EPCG) Scheme in India, exports made to Nepal and Bhutan do not qualify for fulfillment of export obligations under the EPCG license. This is based on the Foreign Trade Policy of India.
Here are the key points:
1. **EPCG Scheme Overview:** - The EPCG scheme allows import of capital goods for pre-production, production, and post-production at concessional customs duty rates, subject to an export obligation equivalent to 6 times the duty saved on capital goods. - The exports made under this scheme are typically eligible for fulfilling export obligations when exporting to countries other than Nepal and Bhutan.
2. **Export to Nepal/Bhutan:** - According to the Foreign Trade Policy, exports to Nepal and Bhutan are considered "deemed exports" and do not contribute to the fulfillment of export obligations under schemes like EPCG. - Deemed exports refer to supplies of goods manufactured in India (including through Special Economic Zones) that are notified as deemed exports under Section 147 of the Central Goods and Services Tax Act, 2017 (12 of 2017), or the rules made thereunder.
3. **Notification/Act Reference:** - The specific exclusion of exports to Nepal and Bhutan from the EPCG scheme's export obligation fulfillment is typically found in the Foreign Trade Policy documents issued by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, Government of India. - For detailed reference, you can consult the latest Foreign Trade Policy document available on the DGFT website or refer to relevant notifications issued by the Ministry of Finance or DGFT.
Therefore, exports to Nepal and Bhutan, even if payments are received in foreign currency like dollars, do not qualify for meeting the export obligations under the EPCG license. The obligations under the EPCG license can only be fulfilled through exports to countries other than Nepal and Bhutan as per the current policy framework.
CAclubindia
