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Export Promotion Capital Goods Scheme
Export Promotion Capital Goods Scheme
Definition:
“EPCG refers to the Export Promotion Capital Goods (EPCG) Scheme, which gives the
manufacturer facility for import of capital goods for export production at concessional rate of
duty (generally 5 per cent) against certain level of export obligation over a period of time.”
Capital Goods
o The Zero duty EPCG Scheme is available for the Exporters of Engineering
and electronic Products, basic chemicals and Pharmaceuticals, apparels and
Textiles ,Plastics, Handicrafts, Chemicals and allied products, etc
o Zero duty EPCG Scheme not be available for import of capital goods relating
to export of Scheme products covered under following chapters/headings of
TC(HS) classification:
o Chapters 1 to 24, 25 to 27, 31, 40, 43, 44, 45 , 47 to 49, 68 to 70, 71, 81, 89,
93, 97, 98
An EPCG licence can also be issued for import of capital goods under the Scheme for
Project Imports notified by the Central Board of Excise and Customs under S.No 441 of
Customs Exemption Notification No 21/2002 dated 01.03.2002 wherein the basic
customs duty on imports is 10% with a CVD of 16%.
The export obligation for such EPCG licences would be eight times the duty saved. The
duty saved would be the difference between the effective duty under the aforesaid
Customs Notification and the concessional duty under the EPCG Scheme.
Conditions and obligations
o The import of capital goods for creating storage and distribution facilities for
products manufactured or services rendered for export by the EPCG license
holder would be permitted under the EPCG Scheme
o The export obligation under the scheme shall be, over and above, the average
level of exports achieved by him in the preceding three licensing years for
same and similar products within the overall export obligation period
including extended period
o The export obligation under the scheme shall be, over and above, the average
level of exports achieved by him in the preceding three licensing years for
same and similar products within the overall export obligation period
including extended period
o Any firm/ company registered with BIFR or any firm/ company acquiring a
unit, which is under BIFR, may be allowed EO extension, as per
rehabilitation package prepared by operating agency and approved by
BIFR/Rehabilitation Department of State Government, up to 12 years if not
specified.
o Conditions :
(2) Minimum exports made under old capital goods must be 40% of
total export obligation imposed on first EPCG Authorization.