EXPORT PROMOTION CAPITAL GOODS (EPCG)

Home EXPORT PROMOTION CAPITAL GOODS (EPCG)

EXPORT PROMOTION CAPITAL GOODS
(EPCG)

EPCG is a government scheme intended to enhance the export business of India, by providing duty free import of quality capital goods required for the production, pre and post production of goods and services for physical Export with Exemption of IGST and compensation cess. Capital goods can also be procured from domestic market as per provisions mentioned in FTP.

GOVERNING BODIES:

Regional licensing authorities (RLA) with respect to the provisions in foreign trade policy, FTP and Handbook of procedures (HBP) notified by the Director General of Foreign Trade (DGFT), Ministry of Commerce and Industries.

OBJECTIVES:

  • • To import quality capital goods at 0% custom duty.
  • • To assist the manufacturers to undertake export obligation equivalent to 6 times of the saved taxes and duties in the period of 6 years and the transfer or selling of the capital goods is restricted until the export obligation is fulfilled.

ELIGIBILITY:

  • • Export Manufacturers
  • • Export Merchants
  • • DGFT or State Industrial Infrastructure Corporation or Department of Commerce Certified Service Providers
  • • Supporting manufacturers and service providers upon endorsing the EPCG authorization.

ELIGIBILITY OF GOODS FOR DUTY EXEMPTION:

S.NO ELIGIBLE GOODS NON-ELIGIBLE GOODS
1 All types of Machinery Railway wagons
2 Machine Tools All second-hand capital goods except those without age restrictions
3 Refrigeration Equipment All purpose vehicles, cars, Tractors
4 R&D related Instruments Airport ground handling equipment
5 Dies, tools, Fixtures used in initial fixation All construction material
6 Catalysts for initial charge Computers and Printers

The reduced export obligation of 75% is provided as per para 5.10 of FTP for Green Technology Products such as

  • 🌱 Biomass Gassifiers
  • ♻️ Biomass/Waste boiler
  • 🌬️ Vapor Absorption chillers
  • 🔥 Waste Heat Boiler
  • 💧 Water treatment plants
  • ☀️ Solar Collectors and parts thereof
  • 🚗 Electrically Operated Vehicles like Motor cars, Lorries and Trucks, Motor cycles and Mopeds
  • 🔋 Solar cells
  • 🌬️ Wind Mill, Wind Mill Turbine/Engine
  • 🌞 Equipment for Solar Energy Decentralized and Grid connected products

DOCUMENTS REQUIRED FOR APPLICATION:

  • • Import Export Code
  • • Nexus certificate issued by an independent charted engineer.
  • • Certificate of installation of Capital goods within six months from date of import. If failed to produce an extension of one year with a compensation of rupees 5000 will be charged.
  • • No objection certificate from the concerned commissioner had to be produced by DTA unit during relocation from SEZ unit.
  • • Certificate of supply from SEZ.
  • • Invalidation letter or Advance release order (ARO) need to be produced in case of imports of capital goods intended from indigenous source.
  • • Shipping bills or Bill of exports had to be produced by the authorization holder if intended to export goods through a third-party exporter.

BENEFITS:

  • • Improving Productivity
  • • Upgrading the Technology
  • • Reaching the global standards
  • • Promoting the Industrial Growth and development
  • • Creating opportunities for employment
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