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Information aboug EPCG

jitesh (Excise officer) (83 Points)

17 September 2010

I want all information about EPCG.

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RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 17 September 2010

MR. JITESH,

The Government of India offers many incentives to Indian importer under special schemes. These schemes are mostly available on those imported product, which will be latter on used for manufacturing of goods meant for export. This not only stimulates the industrial growth and development but also brings the foreign currency after the final export process.

One of them is EPCG AUTHORISATION.:-

EPCG is a special type of incentive given to the EPCG license holder. Capital goods imported under EPCG Scheme are subject to actual user condition and the same cannot be transferred /sold till the fulfillment of export obligation specified in the license. In order to ensure that the capital goods imported under EPCG Scheme, the license holder is required to produce certificate from the jurisdictional Central Excise Authority (CEA) or Chartered Engineer (CE) confirming installation of such capital goods in the declared premises. Under Export Promotion Capital Goods (EPCG) scheme, a license holder can import capital goods such as plant, machinery, equipment, components and spare parts of the machinery at concessional rate of customs duty of 5% and without CVD and special duty.

1. The EPCG scheme allows import of capital goods (including CKD/SKD thereof as well as computer software systems and spares, jigs, fixtures, dies and moulds) at 0%/3.09% Customs duty as against the normal total of 23.895%/20.805%, thus providing a duty saved value of more than 20% of the import value. This is subject to an Export Obligation (EO) equivalent to 6/8 times of duty saved, to be fulfilled over a period of 6/8 years reckoned from the date of issuance of license. For large projects, SSI etc. there are more relaxed norms of EO.

2. The scheme covers manufacturer exporters with or without supporting manufacturer(s) / vendor(s), merchant exporters tied to supporting manufacturer(s) and Service Providers.

3. Actual user conditions: Import of capital goods are subject to Actual User condition till the export obligation is completed.

4. Export obligation: The export obligation needs to be fulfilled by the export of goods capable of being manufactured or produced by the use of the capital goods imported under the scheme. In addition upto 50% of the EO can also be fulfilled by any alternate product of the company or even group company. Deemed Exports like supplies to Power Projects, Projects funded by WB/ADB/JBIC etc, EOUs etc. can also be utilized to fulfill the EO .

5. Indigenous Sourcing: A person holding an EPCG license may source the capital goods from a domestic manufacturer instead of importing them. The domestic manufacturer supplying capital goods to EPCG license holders shall be eligible for refund of Excise Duty paid by him. In addition the indigenous supplier can import his own raw material duty free and other benefits which can be discussed.

For Manufacturers

The scheme is quite beneficial to Manufacturer exporters as they can import their CG at a substantial discount. Especially for those manufacturers whose final product is not excisable or is exempt from excise duty (like those in Uttaranchal) since they cannot take the CENVAT credit of the CVD paid on imports and Excise Duty paid in Domestic markets.

Merchant Exporters tied with the supporting manufacturers can also utilize the scheme for concessional duty import of Capital Goods to be installed at the supporting manufacturers.

For Projects

EPCG can be taken for the full projects where exports of goods or services can be envisaged by the use of the project or alternative products. This can be taken for Captive Power units also. EPCG can be taken along with Project Import scheme in case of new Projects.

For Service Provider

Various service providers/exporters can take EPCG route to reduce their Capital Cost. Service Providers like Hotels, Hospitals, Tour Operators, Taxi Operators, Construction Companies, Logistics companies can utilize the scheme to import/procure from domestic market, their capital goods at a substantially reduced costs. The EO can be fulfilled by Forex Earnings through providing services, like that of Foreign Guests staying in the hotel, medical tourism etc.

For Others

Certain other sectors like Retail Sector in the country, Port Projects etc. can also utilize EPCG scheme to their advantage.

For more info:- https://exim.indiamart.com/indian-exim-policy/epcg.html

https://dgft.gov.in

https://www.infodriveindia.com/exim/Guides/How-To-Import/Ch_12_Import_Incentives_under_Special_Schemes.aspx#Export_Promotion_Capital_Goods_Scheme_(EPCG)

Ramesh verma

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vishal (Imp-Exp Executive) (24 Points)
Replied 01 January 2011

Dear Sir,

Please give me advice about epcg. we have applied for epcg 0% in dgft, what should we do after getting epcg licence. please send me the step by step process.

Regards,

vishal jani

RAMESH KUMAR VERMA ( CS PURSUING ) (43853 Points)
Replied 03 January 2011

AFTER RECEIVING THE LICENCE / AUTHORISATION HOLDER GET REGISTERED AT CUSTOM DESIRED AT THE TIME OF ISSUANCE THIS LICENCE.

HIRE AN CHA FOR REGISTRATION THE SAID AUTHORISATION AND SOME DOCUMEMTS i.e, BOND,( / BG OR BOTH AS CASE MAY BE ) , ORIGINAL AUTHORISATION , IEC, VALID RCMC, DECLARATION OF DEFAULTER , ID PROOF OF AUTH. SIGNATORY OF YOUR COMPANY, WILL BE SUBMIT AT THE TIME OF REGISTRATION .

BOND VALUE / BG VALUE WILL BE 15%OF DUTY SAVED.

REGARDS,

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