EPCG License is intended to promote exports and the Government through this scheme provides incentives and other financial assistance to Exporters. Heavy exporters can take advantage of this scheme.
It is a scheme introduced by the government to incentivize exports and can serve to benefit industries and companies of all sorts in all sectors. It consists in the waiving of import duty on products imported in return for performance or discharge of an export requirement or obligation to the tune of several times the import duty saved within a preset time.
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.
Export Promotion Capital Goods (EPCG) Authorizations are issued by licensing authority – Director General of Foreign Trade (DGFT) based on the certificate issued by an Independent chartered engineer.
This is a Scheme that enables an importer (being an export-oriented business) to import capital goods at zero rates of customs duty. However, the scheme is subject to an export value equivalent to 6 times of duty saved on the importation of such capital goods within 6 years from the date of issuance of the authorization.
The capital goods allowed under Export Promotion Capital Goods Scheme shall include spares (including reconditioned/ refurbished), fixtures, jigs, tool, moulds and dies. Further, second-hand capital goods may also be imported without any restriction on age under the EPCG Scheme.
Under this scheme of Foreign Trade Policy (FTP), importation of capital goods required for the manufacturing of export-oriented product specified in the Export Promotion Capital Goods Authorization is permitted at concessional/nil rate of duty.
The following types of capital goods can be imported into India at zero customs duty under the EPCG scheme:
- Plant, machinery, equipment or accessories required for manufacture or production, either directly or indirectly, of goods or for rendering services, including those required for replacement, modernisation, technological upgradation or expansion.
- Packaging machinery and equipment
- Refractories for initial lining
- Refrigeration equipment
- Power generating sets.
- Machine tools
- Catalysts for initial charge
- Equipment and instruments for testing, research and development, quality, and pollution control.
- Capital goods are used in manufacturing, mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture and viticulture as well as those used in services sector.
- Computer software systems
- Spares, moulds, dies, jigs, fixtures
- Catalysts for initial charge plus one subsequent charge
Eligibility Criteria :
Manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers are eligible under the EPCG scheme. EPCG scheme also covers Common Service Provider (CSP).
Documents Required:
ANF 5B is to be filled along with Self-certified copies of the followings:
- Import Export Code (IEC)
- Registration cum Membership Certificate (RCMC)
- Digital signature
- Pan Card
- GST Registration Certificate
- Proforma Invoice
- Brochure
- Self-Certified Copy + Original of Certificate of Chartered Accountant
- Self-Certified Copy + Original of Certificate of Chartered Engineer
Validity:
Authorization shall be valid for import for 24 months from the date of issue of Authorization. Revalidation of EPCG Authorization shall not be permitted.
