EPCG Scheme | Everything you need to know - A Brief Overview

Описание: EPCG (Export Promotion Capital Goods) Scheme helps in facilitating the import of capital goods for manufacturing quality goods and to augment the competitiveness of India’s export.
EPCG scheme enables the import of capital goods that are used in the pre-production, production, and post-production without the payment of customs duty.
What is EPCG Scheme?
The Export Promotion Capital Goods (EPCG) scheme was launched by the Directorate General of Foreign Trade (DGFT) under Chapter 4 of the Foreign Trade Policy (FTP) 2015-20. The idea behind the introduction of this scheme was the facilitation of capital product imports so that Indian manufacturers can use them to produce quality goods. This scheme aims to improve India’s manufacturing prowess in the global market.
When is EPCG Applicable?
The EPCG scheme can be availed of on the import of capital goods during the pre-production, production, and post-production stage with nil customs duty. The scheme is applicable when the imported goods are:
• Capital goods under the definition provided in Chapter 9 of the FTP 2015-20, including those in semi-knocked down and completely knocked down condition
• Computer systems and software as parts/components of the capital goods
• Spares and tools, moulds, dies, fixtures, jigs and refractories
• Catalysts procured for the initial charge and one additional charge
• Capital goods for project imports, if notified by the Central Board of Excise and Customs.
Export Obligation under EPCG Scheme
Export Obligation (EO) is an arrangement used in the import of capital goods under the EPCG scheme. Such imports are made under an EO, which must be six times the duty that would otherwise be paid on the import of the capital goods. The EO must be fulfilled within six years from the date of issuance of the EPCG authorisation.
Some conditions are applicable for the EO to be fulfilled:
• The export obligation is to be fulfilled by the authorisation holder through the export of products manufactured by themselves or through their supporting manufacturer/services.
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