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

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:

1. Basic Customs Duty;
2. Additional Duty under sus-sections (1),(3) and (5) of Section 3 of the Customs Tariff Act;
3. IGST (available upto 31.03.2019)