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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 ..... ned Jurisdictional Customs Authority. The wastage so permitted at the time of issuance of authorisation would be allowed to be sold as scrap/waste on payment of applicable duty. (c) An application for amendment in the list of import item(s) including addition(s)/deletion(s), if any, may be filed with RA concerned provided the authorisation is valid for import. The applicant would give justification for seeking such amendment(s) along with fresh nexus certificate from an independent Chartered Engineer. (d) An application for amendment in the list of export item(s) including addition(s)/deletion(s) if any, may be filed with RA concerned provided the Export Obligation period of the authorisation is valid and the CG has nexus with export product. The applicant would give justification for seeking such amendment(s) along with fresh nexus certificate from an independent Chartered Engineer. 5.04 Certificate of Installation of Capital Goods 2[(a) Authorization holder shall produce, within six months from date of completion of import, to the concerned RA, a certificate from the jurisdictional Customs authority or an independent Chartered Engineer, at the option of the authorisation hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming their use in the installed capital goods on the basis of such register. 5.07 Conversion of EOU/ Relocated SEZ Units to DTA Unit under EPCG Scheme (a) An EOU/ a relocated SEZ unit, while converting to a DTA Unit, may apply for an EPCG authorisation along with documents prescribed. 'No Objection Certificate' should be produced from the concerned Development Commissioner. (b) The export obligation period for a unit which converts from EOU / SEZ Scheme to EPCG Scheme would be the same as is available to a direct EPCG Authorisation Holder as per Paragraph 5.01 of Foreign Trade Policy (FTP). (c) If a standalone EOU / SEZ unit wishes to de-bond from EOU to EPCG Scheme, there shall be no requirement for maintenance of average export obligation and the unit shall be required to maintain only specific export obligation equivalent to six times of the proportionate duty saved amount of the depreciated value of capital goods for which the Authorisation has been obtained. (d) In case one unit of a firm / company opts to de-bond from EOU to EPCG Scheme, while other unit(s) are DTA units, then the average export obligation in respect of the authorisations issued to the firm / comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isation have been installed. Proceeds realised through normal banking channel from third party exporter's account to the authorisation holder's account on account of such exports only shall be counted towards fulfilment of export obligation. (d) The EPCG authorization holder shall submit the following additional documents for discharge of EO through third party (ies): (i) A copy of agreement entered into between the authorization holder and the ultimate exporter undertaking to export the goods manufactured by the authorization holder/supporting manufacturer for fulfilment of the export obligation against the EPCG authorization in question. (ii) Proof of having despatched the goods from authorization Holder's factory premises to the ultimate exporter/port of export viz. (a) ARE 1 certificate issued by Central Excise / Tax invoice for export prescribed under the GST rules with due authentication by the Customs verifying the exports along with the shipping bill number, date and EPCG authorization number or (b) Invoice duly incorporating the relevant EPCG authorization number & date at the time of dispatch in case the unit is not registered with Central Excise / GST. (iii) Lorry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imports even in cases where export obligation has been fulfilled. 19[(d) For the years 2020-21 and 2021-22. no Average Export Obligation is required to be maintained for EPCG authorizations issued for Hotel, Healthcare and Educational sectors] 5.14 Block-wise Fulfilment of EO (a) The Authorisation holder under the EPCG scheme shall, while maintaining the average export obligation, fulfill the specific export obligation over the prescribed block period in the following proportions: Period from the date of issue of Authorisation Minimum export obligation to be fulfilled Block of 1st to 4th year 50% Block of 5th and 6th year Balance EO 3[(b) The Authorisation holder would intimate the Regional Authority on the fulfilment of the export obligation, as well as average exports, within three months of completion of the block.] 9[(c) Request for extension of Export Obligation period of first block shall be submitted within 6 months from the date of expiry of first block EO period along with composition fee of 2% on duty saved amount proportionate to unfulfilled portion of EO pertaining to the block. RA may consider the request for extension of block wise EO period, received after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial year per authorisation.] 16[17[Time limit to file returns for the year 2022-23 is extended till 31.12.2022]. Late fees of Rs. 5000/- under this para is applicable for the returns due to be filed from the year 2022-23 onwards.] 5.16 Automatic Reduction/ Enhancement upto 10% Duty saved amount and pro rata Reduction/ Enhancement in export obligation 4[If authorization issued has been utilized for import of goods: - 11[(a) in excess of the duty saved amount indicated on the authorization by not more than 10%, the authorization shall be deemed to have been enhanced by that proportion. Customs shall automatically allow clearance of such goods without endorsement by RA concerned. The authorization holder shall furnish additional fee to cover excess imports affected, in terms of duty saved amount, to RA concerned, at the time of application for EODC. Export obligation shall automatically stand enhanced proportionately.]] (b) in excess of duty saved amount indicated on the authorization by more than 10%, the RA concerned, as per its delegated powers, may allow enhancement in duty saved amount of the EPCG authorization. The Authorisation holder shall furnish additional BG/LUT to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (EO) period is expiring during the period between 01.08.2020 and 31.07.2021, the Export Obligation period would be extended till 31.12.2021 without any composition Fees. Ilowever this extension is subject to 5% additional export obligation in value terms (in free Foreign Exchange ) on the balance Export Obligation on the date of expiry of the original/extended export obligation period. b. The option to avail EO extensions with payment of composition fees under this para (5.17(c)) would remain available for these authorisations as per eligibility. c. In cases where EPCG Authorisation Holder has already obtained EO extension upon the payment of composition fee, the refund of the composition fee will not be permitted.] 20[(g): i) For EPCG authorizations issued for Hotel, Healthcare and Educational sectors, Export Obligation (EO) period may be extended from the date of expiry for the duration equivalent to the number of days EO period falls within 01.02.2020 and 31.03.2022. Such extension shall be granted without payment of composition fees. EO extension already granted if any in terms of Public Notice No. 67/2015-20 dated 31.3.2020 and Notification No. 28/2015-20 dated 23.9.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecline. (b) The sectors /product 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 refix the annual average EO for previous year accordingly for exporters in that sector / product group. 13[5.19A - Maintenance of Annual Average Export Obligation The excess exports done towards the average export obligation fulfillment of an EPCG authorization during a year can be used to offset any shortfall in the Average EO done in other year(s) of the EO period or the block period as the case may be, provided Average EO imposed is maintained on an overall basis, within the EO period.] 5.20 Automatic EO extension in the event of ban on export product Whenever a ban/restriction is imposed on export of any product, export obligation period in respect of EPCG authorisations already issued prior to imposition of ban on such export products would stand automatically extended for a period equivalent to duration of such ban, without any composition fee. Authorisation holder would not be required to maintain average E.O. as well for the ban period. 5.21 Deleted 14[5.22 Expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported, within two years from the date of clearance by Customs of such goods, with permission of RA / Customs Authority and Capital Goods in replacement thereof be imported under EPCG scheme. In such cases, while allowing export, the Customs shall credit the duty benefit availed which can be debited again at the time of import of such replaced Capital Goods. (c) Capital Goods imported under EPCG scheme, may be re-exported for repairs abroad within three years from the date of clearance by Customs of such goods, with permission of RA / Customs Authority. The duty component on the expenditure incurred on the repairs as well as the insurance and the freight, both ways shall be taken into account for re-fixation of the EO. 5.26 Penal Action In case of failure to fulfil export obligation or any other condition of authorisation, authorisation holder shall be liable for action under FT (D&R) Act, 1992, as amended, Orders and Rules made thereunder, provisions of FTP/HBP, Customs Act, 1962, as amended from time to time or any other law in force. 5.27 Clubbing of EPCG authorisations (a) Clubbing of two or more EPCG authorisations issued to the same authorisation holder would be permitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ific EO, computed as if the imports were to take the benefit of duty exemption; and (iv) EOP, which shall commence from the Authorisation issue date. (d) Exporter can file request in ANF 5 B, for issuance of Duty Credit Scrip(s) in proportion to the EO completed within the specified EOP. Only for first such request, proof of actual duty payments on Capital Goods, nexus and installation certificate(s) of Capital Goods shall be submitted alongwith proof of fulfilment of EO alongwith proof of maintenance of Average EO. Subsequently, only proof of fulfilment of specific EO (alongwith proof of maintenance of Average EO) additionally completed vis-à-vis specific EO fixed {as in c(iii) above} may be submitted, unless there have been any changes in documents / proofs submitted earlier. (e) RA shall issue freely transferable duty credit scrip(s) equivalent to proportionate EO fulfilled. (f) The computation of freely transferable Duty Credit Scrip(s) will be based on basic Customs duty amount paid. (g) Deleted (h) All provisions of the existing EPCG Scheme shall apply insofar as they are not inconsistent with this scheme. (i) The CG imported under paragraph 5.12 of FTP shall no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Regional Authority on the fulfilment of the export obligation, as well as average exports, within three months of completion of the block, by secured electronic filing using digital signatures." 4. Substituted vide Public Notice No. 22/2015-20 31-07-2019 before it was read as "If authorization issued has been utilized for import of goods: - (a) in excess of duty saved amount indicated on the authorization by not more than 10%, the authorization shall be deemed to have been enhanced by that proportion. Customs shall automatically allow clearance of such goods without endorsement by RA concerned. The authorization holder shall furnish additional fee to cover excess imports effected, in terms of duty saved amount, to RA concerned, within one month of excess imports taking place. Export obligation shall automatically stand enhanced proportionately." 5. Inserted vide PUBLIC NOTICE No. 67/2015-2020 dated 31-03-2020 6. Inserted vide PUBLIC NOTICE No. 67/2015-2020 dated 31-03-2020 7. Inserted vide PUBLIC NOTICE No. 67/2015-2020 dated 31-03-2020 8. Inserted vide Notification No. 28/2015-2020 dated 23-09-2021 9. Substituted vide PUBLIC NOTICE NO. 03/2015-2020 dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xport obligation fulfilment of an EPCG authorization during a year can be used to offset any shortfall in the Average EO done in other year(s) of the EO period or the block period as the case may be provided Average EO imposed is maintained on an overall basis, within the block period or the EO period as applicable]" 14. Substituted vide PUBLIC NOTICE NO. 03/2015-2020 dated 13-04-2022 before it was read as, "5.22 Redemption (a) Authorisation holder shall apply for redemption in ANF 5B with documents prescribed therein as a proof of EO fulfilment. (b) On being satisfied, RA concerned shall issue a certificate of discharge of export obligation to the EPCG authorisation holder and forward a copy to Customs Authorities with whom BG/LUT has been executed. A statement giving details of the documents submitted by the authorisation holder towards evidence of EO fulfilment shall also be enclosed with the certificate." 15. Substituted vide PUBLIC NOTICE NO. 03/2015-2020 dated 13-04-2022 before it was read as, "(a) In case, EPCG authorisation holder fails to fulfil prescribed export obligation, he shall pay Customs Duty along with applicable interest as prescribed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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