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Introduction The scheme was introduced by Sh. P. Chidambaram – Ministry of commerce in 1990 to allow
import of capital goods at low Custom duty. This scheme has helped in boosting exports in the initial years
of introduction when the customs duty on capital goods were very high. This scheme has primarily helped
exporters to become more competitive as it reduces the initial cost on capital goods .
EPCG scheme :
EPCG scheme EPCG scheme allows import of capital goods for pre production, production and post
production (including CKD / SKD thereof as well as computer software systems) at 5% Customs duty
subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under EPCG
scheme to be fulfilled in 8 years reckoned from Authorisation issue date In case of agro unit, units in cottage
or tiny sector, SSI unit - to be completed EO period in 6 years. It is subject to actual user condition till export
obligation is completed
Eligibility :
Eligibility Manufacture, Mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture,
pisciculture, poultry, sericulture & viticulture Merchant exporter with mentioning details of supporting
manufacture Service Provider
Export obligation :
Export obligation 8 times duty saved amount over a period of 8 years (i.e.duty saved amount X 8 times = EO
fulfilled ) Average Exports :- Average level exports to be calculated simple arithmetic mean of past 3 years
export performance.
Installation certificate :
Installation certificate Installation certificate to be submitted to RLA from jurisdictional C.E authorities or an
independent chartered engineer confirming installation of CG at factory premises with in six months from the
date of import whereas in case of spares the certificate to be submitted with in 3 years time from the date of
import.
Miscellaneous :
Miscellaneous EPCG holder shall submit to RLA by 30th April of every year, report of EO. RLA may issue
partial EO fulfillment certificate proportionate adequate to fulfillment of export obligation. Every EPCG holder
should maintain record up to 3 years from the date of redemption. CG imported under EPCG scheme, which
are found defective, may be re-exported is permitted within three years from the date of payment of duty
with permission of RLA/ Customs. Accordingly EO would be refixed.