The Export Promotion Capital Goods (EPCG) Licence issued to Manufacturer to import capital goods with 0% duty, but with conditions to fullfill the export obligation equivalent to 6(Six) times of duty saved of imports made within validity period, licence validity is 6 (Six) years to complete Import as well as Export Obligation.
While Import is made under this EPCG, the license holder(Manufacturer)has to execute the Bond with Custom authorities under Notification no.97/2004 Dt.17/9/2004 specifying the liability of duty saved amount and fullfilment of export obligation within stipulated time period failing which the duty liability will be liable for recovery.
This executed Bond has to be got cancelled with customs authorities after producing the Export Obligation Discharge Certificate (EODC) issued by the licensing authorities.
The customs bond will remain active untill the EODC is not produced before them. The recovery process by customs will start on completion of licence validity.
EPCG For Manufacturers
EPCG Scheme allows import of capital goods for preproduction, production and post-production at Zero customs duty.
Alternatively, the Authorization holder may also procure Capital Goods from indigenous sources. Import of capital goods shall be subject to Actual User condition till export obligation is completed.
WHO IS ELIGIBLE
EPCG scheme covers manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers. Name of supporting manufacturer(s) shall be endorsed on the EPCG authorisation before installation of the capital goods in the factory / premises of the supporting manufacturer (s).
BENEFITS
EXEMPTION FROM THE FOLLOWING DUTIES:
Import – Export License Consultancy towards Import
Foreign Trade Policy 2015-2020 allows the Duty free Import of Raw material under Advance Authorization and has allowed import of the Capital goods under the Export Promotion of Capital Goods to Manufacturer / Supporting Manufacturer / Export Oriented Undertakings (EOU) / Unit holder / Software Technology Parks (STPs) / Electronic Hardware Technology Park (EHTP) / Bio-Technology Parks (BTPs).
The imports are listed under HS Code for all products / items with eligibility marked as “Free” or “Restricted” materials.
Payment of Revenue Deposit to Customs
The Revenue Deposit is paid to Customs under the Customs Act 1962, mainly by the Importers who have their related business suppliers/partners settled abroad and after their transaction towards material/raw material is imported by the importer settled in India.