Epcg license

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 January 2014 If we have taken EPCG license on 08/08/2008, how block of years will be computed...i.e, whether completed years are being counted or part of the year may constitute an year.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
Follow

13 January 2014 as per DGFT TRADE NOTICE NO.14 DTD 30.05.2005 Para 5.19 (c) shall be amended to read as under:
*******************************************
For all the EPCG licences, the licence holder should have fulfilled the mandated (original or amended, as the case may be) block wise export obligation at the end of the previous block in which the application is made.

Para 5.19(d) shall be amended to read as under:
****************************************
In cases where the remaining original export obligation period (and not the extended export obligation period) of the EPCG licence is less than two years on the date of application for refixation, and the mandated (original or amended, as the case may be) block-wise export obligation has been fulfilled, the export obligation would be refixed at two times the duty saved on the date of issuance of licence.

Querist : Anonymous

Querist : Anonymous (Querist)

13 January 2014 Sir
kindly explain it in layman language plzz

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

13 January 2014 As per FTP 2004-09, EO were to be fulfilled in 8 years:
1-6th years-50%
6th & 7th yr-50%.
So if we have been granted license on 08.08.2008, hw block wil b calculated?
like it wil b from 08.08.08-08.08.14(first block)??
or
08.08.2008-31.03.2014??

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
Follow

13 January 2014 DEAR AUTHOR,

i would like to inform you that refer to para 5.8 of foreign trade policy 2002-07

The licence holder under the EPCG scheme shall fulfil the export obligation over the specified period in the following proportions:

Period from the date of issue of licence
Proportion of
totalexport
obligation
Block of 1st and 2nd year NIL
Block of 3rd and 4th year 15%
Block of 5th and 6th year 35%
Block of 7th and 8th year 50%

further para 5.8.1 added:

Period from the date of issue of licence.

Proportion of total
export obligation

Block of 1st to 5th year NIL
Block of 6th to 8th year 15%
Block of 9th and 10th year 35%
Block of 11th and 12th year 50%

para 5.8.2 However, the export obligation of a particular block of year may be set off by the excess exports made in the preceding block of year.

para 5.8.3
**********

Where export obligation of any particular block of year is not fulfilled in terms of the above proportions, except in such cases where the export obligation prescribed for a particular block of year is extended by the competent authority, such licence holder shall, within 3 months from the expiry of the block of years, pay duties of customs plus 15% interest of an amount equal to that proportion of the duty leviable on the goods which bears the same proportion as the unfulfilled portion of the export obligation bears to the total export obligation.

regards,

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
Follow

13 January 2014 PCG Scheme is contained in Chapter 5 of the Exim Policy 2002-07. 5% of Duty EPCG Scheme, which was hitherto in operation, has been continued with some changes. Whereas the normal EO period of EPCG License of value not exceeding Rs. 100 crores has been maintained at 8 years, in respect of licenses of value Rs. 100 crores or more, a longer EO period of 12 years has been prescribed. The four blocks in respect of such EPCG licence would comprise of

1st Block - 0-5 years
2nd Block - 6-8 years
3rd Block - 9-10 years
4th Block - 11-12 years

The new EPCG Scheme also permits granting extension of block-wise EO period more that once during the total EO period by competent authority. In addition, in respect of EPCG License having total EO period of 8 years, the Scheme also permits extension of overall EO period up to a total period of 2 years by competent authority. The provision regarding recovery of differential duty and interest in the event of non fulfillment of block-wise EO period for 2 consecutive blocks has also been
done away with. Para 5.5 of the Exim Policy also permits fulfillment of export obligation under EPCG Scheme by Export of goods capable of being manufactured from the capital goods imported under EPCG Scheme. Similarly, export obligation under the Scheme is also allowed to be fulfilled by export of same goods (for which EPCG license is obtained), manufactured or produced in different manufacturing units of the license holder.

It is reiterated that redemption of Bond/ BG against license (with Customs) issued under EPCG Scheme should normally be allowed on the basis of EO Discharge Certificate issued by DGFT authorities. However in doubtful cases or where investigations have been launched by Customs or other Agencies, Customs may require DGFT to take suitable corrective action.

Other procedural requirements of EPCG Schemes as outlined in DOR Circular Nos.39/2000-Cus. dated 11.05.2000, 80/2000-Cus. dated 22.09.2000 and earlier DOR Circulars shall continue to be followed with the aforesaid modifications.

Customs Notification Nos. 44/2002-Cus dated 19.04.2002 has been issued to operationalise this Scheme.