EPCG License, Customs - Exim - SEZ

[Mathi Bharathi]

Hi, We have obtained EPCG license by the year of 2016 and we have achived the Export obligation by 50 percentage only (AA Nil ) We don't have the exports further . From this scenario, Shall go for redemption by 50% of EO and shall pay the customs duty along with interest for balance 50% portion which is not achived? Please guide

Posts / Replies

[KASTURI SETHI]

Procedure is laid down in Para 4.50 and 5.21 of FTP 2023.

5.21 Regularization of bonafide default and exit from EPCG scheme

(a) Authorisation holder shall have the option to surrender the unutilised authorisation at any point of time. In such cases no penalty or fees shall be levied.

(b) In case, EPCG authorisation holder fails to fulfill prescribed export obligation, he shall pay customs duty/taxes/cess in proportion of shortfall in export obligation along with applicable interest as prescribed by Customs Authority. Such facility can also be availed by EPCG authorisation holder to exit at his option.

(c) In case of domestic sourcing of capital goods through invalidation letter/ARO, the duties, taxes and cess payable shall be with reference to the notional Customs duties/taxes/cess saved on the FOR value of capital goods (including spares, jigs, fixtures, dies and moulds).

(e) Authorisation holder can also provisionally pay duty and interest suomoto on the basis of self/own calculation as per the procedure specified in paragraph 4.50 of HBP.

4.50 Payment of Customs Duty and Interest in case of bonafide default in Export Obligation

(a) Customs duty with interest as notified by DoR to be recovered from Authorisation holder on account of regularisation or enforcement of BG/LUT, shall be deposited by Authorisation holder in relevant Head of Account of Customs Revenue i.e., "Major Head 0037 - Customs and minor head 001-Import Duties” Online through ICEGATE Payment Gateway within 30 days of demand raised by Regional / Customs Authority and documentary evidence shall be produced to this effect to Regional Authority / Customs Authority immediately. Exporter can also make suo motu payment of customs duty and interest based on self/own calculation as per procedure laid down by DoR, which would be adjusted at the time of closure of the case.

(b) Mode of payment: Online through ICEGATE Payment Gateway

(c) Exporter shall produce documentary evidence of online payment to Regional Authority along-with duty calculation sheet at the time of regularization of their case.

(d) Regional Authority shall verify the quantity of excess import before redeeming the case. Regional Authority may direct license holders to pay balance amount of customs duty after informing the reasons of the difference in the liability worked out by Authorisation holder and the calculations by Regional Authority. In such case, the balance amount of duty and interest, if any shall be paid by Authorisation holder within 30 days, for regularization of the matter.

(e) The interest shall be paid Online through ICEGATE Payment Gateway at the rate applicable on the date of payment of delayed duty amount to the Customs Authority.

(f) On receipt of said documentary evidence from Authorisation holder, Regional Authority shall redeem the case, and endorse details of duty paid on the EODC/Redemption Letter and inform details of recovery/ deposits made to the Customs Authority at the port of registration or the Commissioner of Customs having jurisdiction over the factory of the Authorisation holder, as the case may be.

(g) Payment of duty, interest and any dues for regularisation shall, however, be without prejudice to any other action that may be taken by Customs Authorities at any stage under Customs Act, 1962.

[Shilpi Jain]

Up to 31.12.2023 if you could have applied for the redemption there was an amnesty scheme available wherein the interest was resticted to duty amount and penalty was waived off.