Amnesty Scheme - Advance Authorization & EPCG License

[Sandeep Saini]

The Government has provided one time opportunity to redeem Advance authorization and EPCG license in case export obligation is not fulfilled. In this regard, The Directorate General of Foreign Trade (“DGFT”) vide Public Notice No. 2/2023 dated 01.04.2023 has introduced an amnesty scheme for settlement of default in export obligation by Advance Authorization and EPCG license holders.

As per the scheme, all the pending cases of the default in meeting Export Obligation (“EO”) may be regularized by the Authorization Holder or EPCG license Holder on payment of applicable Customs duty, corresponding to the shortfall in EO. Further, the interest payable is capped at maximum of 100% of the Basic Customs Duties saved. However, no interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty saved.

Who are eligible for the Scheme?

The following category of Authorization and EPCG license holders are eligible to avail benefit under the scheme:

1. The authorizations issued under the Advance Authorization Scheme and EPCG Scheme issued under Foreign Trade Policy (“FTP”) 2009-2014 till 31.03.2015.
2. The authorizations issued under Advance Authorization Scheme and EPCG Scheme issued under FTP, 2004-2009 and before, whose export obligation period (Original or extended) was valid beyond 12.08.2013.
3. The cases which have been already adjudicated (or adjudication pending), or case pending in appeal can also be regularized.

However, the following cases will not be eligible under the Scheme:

1. The cases which are under investigation or cases involving fraud, misdeclaration, unauthorized diversion of material or capital goods.
2. In case customs duty along with applicable interest has already been deposited in full.  

What are the benefits provided under the Scheme?

The given scheme is introduced to facilitate the exporters to regularize their compliances in respect of Advance Authorizations and EPCG licenses. Holders of Advance and EPCG Authorizations who have defaulted on their export obligations can now avail the following benefits in regularizing these licenses under the Amnesty Scheme:

1. Advance authorization and EPCG license can be redeemed and case can be closed on payment of saved Customs Duty (BCD+ACD+SAD) in proportion to Export Obligation that could not be fulfilled.
2. Interest payable is capped at maximum of 100% of Basic Customs Duty only.
3. No interest to be paid on the portion of Additional Customs Duty and Special Additional Customs Duty.
4. No penalty or fine to be paid.

How to avail benefit under the Scheme?

Those authorization holders who wants to avail benefit under the given scheme has to apply online on website: https://www.dgft.gov.in on or before 30.06.2023.

1. Online application shall be filed online by logging on above mentioned website and then navigating to services → Advance Authorization/DFIA → Closure of Advance Authorization →. For EPCG navigate to Services → EPCG → Closure of EPCG.
2. Select the checkbox “Amnesty Scheme for One time settlement of default in export obligation” and then proceed to file application against the concerned Advance authorization or EPCG license.
3. Applicant shall self-assess the duty and interest to be paid under “Redemption Matrix” tab and submit the application.
4. On receipt of application, RA concerned shall examine and confirm the amount through online letter.
5. Applicant shall make the required payment to jurisdictional customs authority on or before 30.09.2023 and provide proof of payment as response to the said letter.
6. Based on payment proof and other documents on record, RA shall issue the discharge certificate.

Conclusion:

This is one-time opportunity provided for settlement of default in EO by the Advance and EPCG Authorization Holders. Therefore, without any further delay interested Advance/EPCG license holders should avail the benefit under the given scheme by filing application on or before 30.06.2023.