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TMI BlogEXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEMEX X X X Extracts X X X X X X X X Extracts X X X X ..... o duty EPCG scheme shall also not be available to applicants, who avail in that year, the benefit of Status Holder Incentive Scheme under Paragraph 3.16 of FTP. All other provisions pertaining to the concessional 3% EPCG scheme under this Chapter, to the extent they are not inconsistent with the above provisions of zero duty EPCG scheme, shall be applicable to the zero duty scheme also. Application Form 5.2 An application for grant of an authorization may be made to RA concerned in ANF 5A along with documents prescribed therein. 5.3 RA concerned shall, on the basis of nexus certificate from an Independent Chartered Engineer (CEC) submitted by the applicant in Appendix 32A, issue EPCG authorization. Reasonable wastage, if any, anticipated at the time of installation of capital goods will also be certified by the Chartered Engineer in the nexus certificate and the same would be mentioned in the condition sheet of the EPCG authorization at the time of issue. RA shall thereafter forward a copy of the EPCG authorization to the concerned Jurisdictional Central Excise Authority. The wastage so permitted at the time of issuance of authorization would be allowed to be sold o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital goods 5.5 EPCG authorization holder intending to source capital goods indigenously, either alongwith application or after issuance of EPCG authorization, shall request to RA for invalidation of EPCG authorization for direct import/ issue of ARO , alongwith name and address of source person of the capital goods. 5.5.1 RA concerned will issue such invalidation letter/ARO, in duplicate. 5.5.2 Indigenous manufacturer intending to supply capital goods to EPCG authorization holder may apply to RA in ANF for issuance of Advance authorization for import of inputs including components required for manufacture of capital goods to be supplied to EPCG authorization holder. Leasing of Capital Goods 5.6 An EPCG authorization holder may, source capital goods from a domestic leasing company. In such cases, the Bill of Entry of imported capital goods or commercial invoice of indigenous capital goods, shall be signed jointly by EPCG authorization holder and leasing company. However, EPCG authorization holder shall alone be fully responsible for fulfillment of export obligation. Conditions for fulfillment of Export Obligation 5.7 In addition to conditions mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would however be permitted after fulfillment of EO, under intimation to RA and jurisdictional Central Excise Authority. 5.8 The Authorization holder under the EPCG scheme shall fulfill the export obligation over the specified period in the following proportions: For Zero Duty EPCG Scheme Period from the date of issue of Authorization Minimum export obligation to be fulfilled Block of 1st to 4th year 50% Block of 5th and 6 th year 50% For concessional 3% duty EPCG Scheme Period from the date of issue of Authorization Minimum export obligation to be fulfilled Block of 1st to 6th year 50% Block of 7th and 8th year 50% 5.8.1 In respect of Authorizations, on which the value of duty saved is Rs.100 crore or more , the export obligation shall be fulfilled over a period of 12 years (not applicable to zero duty EPCG scheme) in the following proportion:- Period from the date of issue of Authorization Minimum export obligation to be fulfilled Block of 1st to 10th year 50% Block of 11th and 12th year 50% 5.8.2 However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 10% of authorization value/ duty saved amount, without endorsement by concerned RA In such case, authorization holder shall furnish additional fee to cover excess imports effected, in terms of CIF value/duty saved amount, to RA concerned, within one month of excess imports taking place. Export obligation shall automatically stand enhanced proportionately. In case of utilization being more than 10%, concerned RA as per their financial powers, may endorse as per extant provisions. Authorization holder shall furnish additional BG/ LUT to the customs authority. 5.10.1 Similarly, if EPCG authorization holder has utilized authorization less than the value earmarked in authorization, his export obligation shall stand reduced on prorata basis with reference to actual utilization of authorization. Extension of Export Obligation Period 5.11 Concerned RA, may consider one or more requests for grant of extension in export obligation period, on payment of composition fee equal to 2% of proportionate duty saved amount on unfulfilled export obligation or an enhancement in export obligation imposed to the extent of 10% of total export obligation imposed under authorization, as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... groups for which this relaxation is to be allowed shall be conveyed by the DGFT to all the RAs within seven months of the end of the previous financial year, and the RAs shall re-fix the annual average EO for previous year accordingly, for exporters in that sector/product group. ] Automatic EO extension in the event of ban on export product 5.11.3 Whenever a ban/restriction is imposed on export of any product, export obligation period in respect of EPCG authorizations already issued prior to imposition of ban of such export products, would stand automatically extended for a period equivalent to the duration of ban, without any composition fee and exporter would not be required to maintain average E.O. as well for the ban period. Export Obligation Shortfall 5.12 RA concerned may condone shortfall upto 5% in export obligation arising out of duty saved amount. Redemption 5.13 As evidence of fulfillment of export obligation, authorization holder shall furnish application in ANF 5 B with documents prescribed therein. On being satisfied, RA concerned shall issue a certificate of discharge of export obligation to the EPCG authorization holder and send a copy to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Act, 1962. Clubbing of EPCG authorization 5.18 Clubbing of two or more EPCG authorizations of same authorization holder would be permitted. 5.18.1 An application for clubbing can be made only to RA concerned in ANF 5D. Clubbing shall not be permitted in case authorizations are issued by different RAs. 5.18.2 Total export obligation would be refixed taking into account total of duty saved or total of CIF value of imports. 5.18.3 On Clubbing, authorizations for all purpose shall be deemed to be a single EPCG authorization. Export obligation period for clubbed authorization shall be reckoned from first authorization issue-date. However, in cases where clubbed CIF /duty saved value exceeds Rs.100 crore, no corresponding benefit of increase in export obligation period shall be admissible. 5.18.4 Average export obligation for clubbed authorizations would be highest of average export obligations endorsed on individual authorizations so clubbed. 5.18.5 No clubbing would be permitted after expiry of EOP. 5.18.6 The aforesaid provisions for Clubbing of EPCG Authorizations shall be applicable for authorizations issued on or after 1.4.2007. However, EPCG aut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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