Epcg export promotion obligation

This query is : Resolved

Prachita Jain (Querist)
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08 February 2017 One of my client has already applied for EPCG scheme in the year 2014 and also received the respective license. Now as per scheme, it has to fulfill export obligation of annual average export performance as well as export value of 6 times of duty saved. It also needs to file RA at every year as per scheme.

Unfortunately my client is not able fulfill the export obligation. It has made export sales upto the value of 6 times of duty saved but not able to maintain the annual perfomance level. Are there any remedies for this situation, where an importer importing under the EPCG scheme not able to fulfill the annual export performance?

Also, what type of form is required to submitted for obligation redemption?

And what are the consequences for late filing of RA?

Thanks in advance

CS M Pota

CS M Pota (Expert)
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09 February 2017 Dear Madam

You may refer the following in the Hand Book of Procedures of the Foreign Trade Policy 2015-20

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
(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.
(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 months from the expiry of the block, pay duties of customs (along with applicable interest as notified by DOR) proportionate to duty saved amount on total unfulfilled EO of the first block.
(d) (i) Authorisations issued from 1st April, 2002 upto 31st August, 2004 shall be governed by provisions of paragraph 5.8 of HBP Vol. 1 (RE-02) as amended from time to time.
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(ii) Authorisations issued from 1st September, 2004 upto 17th April, 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 through PN No. 1 dated 18.04.2013.