A guide to EPCG Scheme

Introduction

This is a scheme that allows an importer (who is an exporter) to import capital goods for zero percent customs duty. The EPCG Scheme (Export Promotion Capital Goods Schemes) helps to make it easier to import capital goods for the production of high-quality products and to boost India’s export competitiveness. Capital items used in pre-production, production, and post-production can be imported under the EPCG scheme without having to pay customs duties. In this article, we will discuss all EPCG Services.

What are EPCG Services?

The Government of India (GOI) has introduced the EPCG (Export Promotion Capital Goods) Scheme, which facilitates the import of capital goods for pre-production, production, and post-production for zero customs charge (except for those items listed in the negative list in the Appendix 5F).

Exporters are given permission under the EPCG scheme to import capital goods at a reduced rate of customs duty. The licensees are required to carry out a particular export obligation (EO) as stated in the scheme’s regulations. As a result, exporters are required to export a prescribed quantity of commodities associated with the capital goods imported under the scheme within certain years of the license issue date. In simple words, the EPCG services aim to increase the quality of Indian products, which will subsequently increase both domestic and international demand for Indian products. The government also hopes to improve India’s export competitiveness through this program.

Which documents are needed to obtain an EPCG license?

Director General of Foreign Trade(DGFT): The licensing authority is the issuing authority. The following documents must be self-certified and attached to ANF 5B:

• Import Export Code (IEC)
• Registration cum Membership Certificate (RCMC)
• Digital signature
• Certificate of Registration from the Tourism Department
• Pan Card
• Registering for Excise (if registered)
• GST Registration Certificate
• Proforma Invoice
• Brochure
• Self-Certified Copy + Original of Certificate of Chartered Accountant
• Self-Certified Copy + Original of Certificate of Chartered Engineer

What is the eligibility for the EPCG Scheme?

• Producers who export their goods, either with or without supporting producers,

• Merchant exporters are bonded to support manufacturers.

• Service Providers, such as Common Service Providers (CSP) in a town of export excellence designated by the DGFT, Department of Commerce, and State Industrial Infrastructural Corporation, are subject to the rules under FTP.

Which Capital goods are approved by the EPCG Scheme?

The following capital assets are approved under the EPCG Scheme:

• Capital goods, including capital items imported under CKD or SKD conditions.
• One of the most important components of imported capital goods is computer systems and software.
• Tools, fixtures, jigs, spare parts, moulds, dies, and refractories.
• Catalysts for the initial charge as well as the subsequent charge
• The Central Board of Excise and Customs specified the capital goods required for project imports.

Conclusion

The importation of capital goods under the EPCG services is subject to an export requirement that must be fulfilled within six years of the date the EPCG authorization was issued. The importer of the capital goods is liable to pay prescribed customs taxes and interest on it if the holder of the EPCG authorization is unable to fulfil the specified export requirement.