Andees Consulting Exports and Imports
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EPCG: EXPORT PROMOTION CAPITAL GOODS

An advantageous scheme for procurement of Capital Goods
  • The EPCG scheme allows import of capital goods (including CKD/SKD thereof as well as computer software systems and spares, jigs, fixtures, dies and moulds) at 3% Customs duty as against the normal total of 25.852%, thus providing a duty saved value of more than 22% of the import value. This is subject to an Export Obligation (EO) equivalent to 6/8/12 times of duty saved, to be fulfilled over a period of 8/12 years reckoned from the date of issuance of license. For large projects, SSI etc. there are more relaxed norms of EO.
  • The scheme covers manufacturer exporters with or without supporting manufacturer(s) / vendor(s), merchant exporters tied to supporting manufacturer(s) and Service Providers.
  • Actual user conditions: Import of capital goods are subject to Actual User condition till the export obligation is completed.
  • Export obligation: The export obligation needs to be fulfilled by the export of goods capable of being manufactured or produced by the use of the capital goods imported under the scheme. In addition upto 50% of the EO can also be fulfilled by any alternate product of the company or even group company. Deemed Exports like supplies to Power Projects, Projects funded by WB/ADB/JBIC etc, EOUs etc. can also be utilized to fulfill the EO
  • Indigenous Sourcing: A person holding an EPCG license may source the capital goods from a domestic manufacturer instead of importing them. The domestic manufacturer supplying capital goods to EPCG license holders shall be eligible for refund of Excise Duty paid by him. In addition the indigenous supplier can import his own raw material duty free and other benefits which can be discussed.


For Manufacturers

The scheme is quite beneficial to Manufacturer exporters as they can import their CG at a substantial discount. Especially for those manufacturers whose final product is not excisable or is exempt from excise duty (like those in Uttaranchal) since they cannot take the CENVAT credit of the CVD paid on imports and Excise Duty paid in Domestic markets.

Merchant Exporters tied with the supporting manufacturers can also utilize the scheme for concessional duty import of Capital Goods to be installed at the supporting manufacturers.


For Projects

EPCG can be taken for the full projects where exports of goods or services can be envisaged by the use of the project or alternative products. This can be taken for Captive Power units also. EPCG can be taken along with Project Import scheme in case of new Projects.

For Service Provider

Various service providers/exporters can take EPCG route to reduce their Capital Cost. Service Providers like Hotels, Hospitals, Tour Operators, Taxi Operators, Construction Companies, Logistics companies can utilize the scheme to import/procure from domestic market, their capital goods at a substantially reduced costs. The EO can be fulfilled by Forex Earnings through providing services, like that of Foreign Guests staying in the hotel, medical tourism etc.

For Others

Certain other sectors like Retail Sector in the country, Port Projects etc. can also utilize EPCG scheme to their advantage.

WHAT WE DO
We can assist you in assessing the feasibility of the scheme for your exports/domestic supplies, planning for maximum benefits, documentation, application preparations, representation and coordination with DGFT and other concerned Government Departments till you finally get the Authorisation.

In case of domestic procurement we can assist in getting necessary invalidations from the authority, and the refund of Excise Duty.

Later we will assist you in redemptions of the Authorization.

We also take matters of clarifications/relaxations etc. from the DGFT committees.


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