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TMI BlogAmendment in Chapter 5 pertaining to Export Promotion Capital Goods (EPCG) Scheme of the Hand Book of Procedure (Volume I)X X X X Extracts X X X X X X X X Extracts X X X X ..... rade E-mail: [email protected] (Issued from F. No. 18/03/AM-14/P-5) CHAPTER 5 EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME 5.1 Policy Policy relating to Zero Duty EPCG Schem e is given in Chapter 5 of FTP . 5.2 Application Form An application for grant of an authorization should be made to RA concerned in ANF 5A along with documents prescribed therein. 5.2A EPCG Authorization for Annual Requirement The Authorization for Annual Requirement will be issued subject to the following conditions in addition to other terms and conditions governing the EPCG scheme :- (a) Authorizations shall be issued with a specific duty saved amount and corresponding export obligation. The applicant would be required to indicate export products proposed to be exported under the authorization. (b) The authorization holder shall also be required to submit a Nexus Certificate from an independent Chartered Engineer (CEC) in Appendix 32A, to the Customs authorities at the time of clearance of imported capital goods. A copy of the CEC shall be submitted to the concerned Regional Authority alongwith copy of the bill o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e required. (ii) Value of duty saved allowed under the authorization. (iii) Description of product to be exported with value of export obligation as per FTP. (b) Further, at time of final redemption of export obligation, authorization holder shall submit certificate from Independent Chartered Engineer confirming use of spares, tools, spare refractories and catalyst so imported in the installed capital goods on the basis of stock consumption register maintained by authorization holder. (a) Separate Authorisation shall be issued in case application is filed under Para 5.2A of FTP . 5.4 EPCG Scheme for conversion of EOU/Relocated SEZ Units to DTA Unit An EOU/ a relocated SEZ unit, while converting to a DTA Unit, may apply for an EPCG authorization in ANF alongwith documents prescribed therein. No Objection Certificate should be produced from concerned Development Commissioner. 5.5 Indigenous Sourcing of Capital Goods (a) EPCG authorization holder intending to source capital goods indigenously shall request to RA for invalidating EPCG authorization for direct import / Issuance of ARO. (b) This request ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to account: (i) Exports to such country as may have been notified by DGFT for this purpose from time to time; (ii) Exports being counted for fulfilling specific EO in respect of EPCG Authorizations within valid EO Period (whether original or extended). 5.7.5 Export under EPCG scheme shall also be entitled for benefits under Chapter 4 of FTP . 5.7.6 (a) In case of export of goods relating to: (i) Handicraft, (ii) Handlooms, (iii) Cottage Tiny sector, (iv) Agriculture, (v) Aqua-culture (including Fisheries), Pisciculture (vi) Animal husbandry, (vii) Floriculture Horticulture, (viii) Poultry, (ix) Viticulture, (x) Sericulture, (xi) Carpets, (xii) Coir, and (xiii) Jute the EPCG authorization holders shall not be required to maintain average level of exports. (b) However, this exemption from maintenance of average level of exports shall not be allowed for import of fishing trawlers, boats, ships and other similar items. (c) Goods, excepting tools imported under EPCG s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorizations issued from 1 st September, 2004 upto 17 th April, 2013 shall be governed by provisions of para 5.8 of HBP Vol. 1 (RE-12) as amended till 17.04.2013. 5.9 Monitoring of Export Obligation Authorization holder shall submit to RA concerned by 30 th April of every year, report on fulfilment of export obligation. RA concerned may issue partial EO fulfilment certificate, provided export performance is proportionately adequate to fulfilment of export obligation. 5.10 Automatic Reduction/ Enhancement upto 10% of CIF value and prorata Reduction/ Enhancement in export obligation (a) If authorization issued has actually been utilized for import of a value in excess, upto 10% of CIF value /duty saved amount of authorization, authorization shall be deemed to have been enhanced by that proportion. Customs shall automatically allow clearance of goods in excess, upto 10% of authorization value/duty saved amount, without endorsement by concerned RA. (b) 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 mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al EO Period. (e) Extension in export obligation period shall also be subject to such terms and conditions as may be prescribed by competent authority. 5.11.1 (a) The firm /company,whileapplying for registration with BIFR/Rehabilitation Department of State Government, shall also intimate DGFT with regard to relief sought for EPCG authorization, if any within 30 days of receipt of application by agency concerned. (b) DGFT, thereafter, shall take up the matter with agency concerned to safeguard government interest on account of default in fulfilment of export obligation imposed on EPCG authorization obtained by such firm/companies. (c) DGFT may consider request for grant of extension in EOP upto 9 years, or as per rehabilitation package prepared by operating agency and approved by BIFR board/ state authority. 5.11.2 (a) To provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5% as compared to the previous year, average export obligation for the year may be reduced proportionate to reduction in exports of that particular sector/product group during the relevant year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to fulfil prescribed export obligation, he shall pay Customs Duty along with applicable interest as prescribed by Customs authority. Such facilities can also be availed by EPCG authorization holder to exit at his option. The authorization holder will have the option to furnish valid duty credit scrips, issued under Chapter 3 of FTP , for payment of the customs duty component. 5.15 Maintenance of Records Every EPCG authorization holder shall maintain, for a period of 3 years from date of redemption, a true and proper account of exports/ supplies made and services rendered towards fulfilment of export obligation. 5.16 Re-Export of Capital Goods Imported under EPCG Scheme Capital Goods imported under EPCG scheme, which are found defective or unfit for use, may be re-exported back to foreign supplier within three years from the date of payment of duty on importation thereof, with permission of RA /Customs Authority. Consequently, EO would be re-fixed. 5.16.1 Replacement of Capital Goods Capital Goods imported and found defective or otherwise unfit for use may be exported, and Capital Goods in replacement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies of applicant. 5.21 Revalidation of authorization issued under EPCG scheme shall not be allowed. 5.22 Post Export EPCG Duty Credit Scrip(s) (a) Exporters can exercise this option by filing an application in ANF5A with the concerned RA, selecting an option for this Scheme. (b) For importing Capital Goods, all applicable duties shall be paid in cash by the exporter. (c) RA shall issue an Authorization specifying (i) Not for imports on the body of the Authorization; (ii) Average EO, if any; (iii) Specific EO @ 85% of the applicable specific EO, computed as if the imports were to take the benefit of duty exemption; and, (iv) EOP, which shall commence from the Authorization issue date. (d) Exporter can file request, in ANF5B, for issuance of Duty Credit Scrip(s) in proportion to the EO completed within the specified EOP. Only for first such application proof of actual duty payments on Capital Goods (including proof of duty CENVATed or otherwise), nexus and installation certificate(s) of Capital Goods shall be submitted alongwith proof of fulfilment of EO. Subsequently, only proof of fulfilment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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