An application for grant of an authorization, upto Rs.50 Crore of duty saved amount may be made to RA concerned in ANF 5A along with documents prescribed therein.

For cases wherein duty saved amount is above Rs. 50 crores, applicant may apply to DGFT Headquarters directly with a copy endorsed to concerned RA. In such cases, concerned RAs will issue EPCG authorisation according to directions from DGFT.

RA concerned shall, on the basis of nexus certificate from an Independent Chartered Engineer (CEC) submitted by applicant in Appendix 32A, issue EPCG authorisation.

Authorisation holder shall produce to concerned RA a certificate from jurisdictional Central Excise authority or an independent Chartered Engineer (CEC) confirming installation of Capital goods at factory premises of authorization holder or his supporting manufacturer(s) vendor(s) within six months from date of completion of imports.

EPCG authorization shall be issued with a single port of registration mentioned in paragraph 4.19 of HBP v1 for imports. However, exports can be made from any port specified in paragraph 4.19.

(i) An applicant may also apply for import of spares, tools, spare refractories and catalyst as are required for installation and maintenance of capital Goods. Application shall contain list of plant / machinery installed in factory / premises of applicant for which spares, tools, spare refractories and catalyst are required, duly certified by Chartered Engineer or Jurisdictional Central Excise authorities. In such cases EPCG authorization shall not specify list of spares but shall indicate:-

(a) Name of plant / machinery for which spares are required.

(b) Value of duty saved allowed under authorization.

(c) Description of product to be exported with value of export obligation as per FTP.

(ii) Deleted

(iii) Further at the time of final redeemption of export obligation, authorization holder shall submit certificate from Independent Chartered Engineer confirming use of spares tools, spare refractories and catalyst so imported in the installed capital goods on the basis of stock & consumption register maintained by authorization holder.

EPCG authorization holder intending to source capital goods indigenously, either alongwith application or after issuance of EPCG authorisation, shall request to RA for invalidation of EPCG authorization for direct import / issue of ARO, alongwith name and address of source person of the capital goods.

Indigenous manufacturer intending to supply capital goods to EPCG authorization holder may apply to RA in ANF for issuance of Advance authorization for import of inputs including components required for manufacture of capital goods to be supplied to EPCG authorization holder.

An EPCG authorization holder may, source capital goods from a domestic leasing company. In such cases, the Bill of Entry of imported capital goods or commercial invoice of indigenous capital goods, shall be signed jointly by EPCG authorization holder and leasing company. However, EPCG authorization holder shall alone be fully responsible for fulfillment of export obligation.

In addition to conditions mentioned in paragraph 5.4 of FTP following conditions shall also be applicable for fulfillment of export obligation.

EPCG authorisation holder shall export either directly or through third party(s). If a merchant exporter is EPCG authorisation holder, name of supporting manufacturer shall also be indicated on shipping bills. At the time of export, EPCG authorisation No. and date shall be endorsed on shipping bills which are proposed to be presented towards discharge of export obligation.

Supplies made to Oil and Gas sector also may be counted towards discharge of export obligation against an EPCG Authorisation provided it has been issued on or before 31.3.2000 and no benefit under paragraph 8.3 of FTP has been claimed on such supplies.

Exports made to former USSR or to such countries as notified by DGFT shall not be counted for fixing average level of exports.

Exports under EPCG scheme shall also be entitled for benefits under Chapter 4 of FTP.

In case of export of goods relating to handicraft, handlooms, cottage, tiny sector, agriculture, aqua-culture, animal husbandry, floriculture, horticulture, pisciculture, viticulture, poultry and sericulture shall not be required to maintain average level of exports.

Goods excepting tools imported under EPCG scheme by such sectors shall not be allowed to be transferred for a period of five years from date of imports even in cases where export obligation has been fulfilled. However, transfer of capital goods would be permitted within the group companies or managed hotels under intimation to RA and jurisdictional Central Excise Authority in case of manufacturer/merchant exporters and to RA only in case of Service providers.

Wherever more than one EPCG authorisations are issued simultaneously or concurrently, fresh EPCG authorisation would build upon last average export obligation only, notwithstanding actual achievements.

EPCG Authorisations issued upto 31.3.2000 shall be governed by provisions laid down in paragraph 6.11 in HBP v1 (RE-99). Notwithstanding the same in HBP v1 (RE-99), authorisation holder shall not have to surrender Special Import licence in case of value wise shortfall.

Authorisations issued from 1st April, 2000 upto 31st March, 2002 shall be governed by provisions of Chapter 6 of HBP v1 (RE-01) as amended from time to time.

Authorisations issued from 1st April, 2002 upto 31st August, 2004 shall be governed by provisions of para 5.8 of HBP v1 (RE-02) as amended from time to time. However, provision of clubbing even in case of old licences would be as per current provision of para 5.18 of this Handbook.

In case of an existing export obligation under EPCG scheme a fresh EPCG authorisation can only be issued provided average of last obligation (including increased amount due to duty saved in last EPCG) has been maintained.

Authorization holder shall submit to RA concerned by 30th April of every year, report on fulfillment of export obligation. Such report shall also be submitted electronically on DGFT website. RA concerned may issue partial EO fulfillment certificate, provided export performance is proportionately adequate to fulfillment of export obligation.

If authorization issued has actually been utilized for import of a value in excess upto 10% of CIF value / duty saved amount of authorization, authorization shall be deemed to have been enhanced by that proportion. Customs shall automatically allow clearance of goods in excess upto 10% of authorization value / duty saved amount without endorsement by concerned RA.

In such cases, authorization holder shall furnish additional fee to cover excess imports effected in terms of CIF value / duty saved amount to RA concerned within one month of excess imports taking place. Export obligation shall automatically stand enhanced proportionately.

Similarly, if EPCG authorization holder has utilised authorization less than the value earmarked in authorization, his export obligation shall stand reduced on prorata basis with reference to actual utilisation of authorisation.

Concerned RA, may consider one or more request for grant of extension in export obligation period, on payment of composition fee of 2% of total duty saved under authorization or an enhancement in export obligation imposed to the extent of 10% of total export obligation imposed under authorization, as the case may be, at the choice of exporter, for each year of extension sought. Such extension can be for a maximum period of 2 years.

Extension in EO period beyond two years' period available above, may be considered, for a further extension upto 2 years with a condition that 50% of duty payable in proportion to the unfulfilled export obligation is paid by authorization holder to Custom authorities before an endorsement of extension is made on EPCG authorization by RA concerned. In such cases, no composition fee is to be paid or additional EO is to be imposed as prescribed in the Para above. In case the firm is still not able to complete the export obligation duty already deposited will be deducted from total duty plus interest to be paid for EO default.

Extension in export obligation period shall also be subject to such terms and conditions as may be prescribed by competent authority.

The firm / company, which is applying for registration with BIFR / Rehabilitation Department of State Government shall also intimate DGFT with regard to relief sought for EPCG authorization, if any, within 30 days of receipt of application by agency concerned.

DGFT, thereafter shall take up the matter with agency concerned to safeguard government interest on account of default in fulfillment of export obligation imposed on EPCG authorization obtained by such firm / companies.

DGFT may consider such application for grant of period of extension upto 12 years or as per rehabilitation package prepared by operating agency and approved by BIFR board / state authority.

Waiver of EO may be considered where, because of force majeure or other unforeseen circumstances / reasons, exporter is unable to fulfill export obligation. Such requests shall be considered by a committee comprising representative(s) of DoC and DoR under DGFT. Decision of this committee shall be notified by DoR for implementation.

RA concerned may condone shortfall upto 5% in export obligation arising out of duty saved amount

As evidence of fulfillment of export obligation, authorization holder shall furnish application in ANF 5B with documents prescribed therein. (a) to (c) Deleted.

On being satisfied, RA concerned shall issue a certificate of discharge of export obligation to the EPCG authorization holder and send a copy to customs authorities with whom BG / LUT has been executed. RA shall ensure disposal of such applications within 30 days. Shortcomings, if any, shall be pointed out in one go. All correspondence, thereafter, shall relate to these deficiencies only. Fresh correspondence, if necessary, shall be within 15 days. Once documents are complete EO will be discharged within 30 days of receipt of complete documents / information.

Process of issue of final discharge certificate / rejection shall be completed within a period of 90 days from date of receipt of initial request. Applications that remain outstanding beyond a period of 90 days shall be reported to DGFT alongwith reasons thereof, immediately thereafter.

In case EPCG authorization holder fails to fulfill prescribed export obligation, he shall pay duties of Customs plus interest as prescribed by Customs authority. Such facilities can be availed by EPCG authorisation holder to exit at his option.

Every EPCG authorization holder shall maintain, for a period of 3 years from date of redeemption, a true and proper account of exports / supplies made and services rendered towards fulfillment of export obligation.

Capital Goods imported under EPCG scheme, which are found defective or unfit for use, may be re-exported back to foreign supplier within three years from the date of payment of duty on importation thereof with permission of RA / Customs Authority. Consequently, EO would be refixed.

Capital Goods imported and found defective or otherwise unfit for use may be exported and Capital Goods in replacement thereof be imported under EPCG scheme. In such cases, while allowing export, Customs shall credit duty benefit availed which can be debited again at the time of import of such replaced Capital Goods.

In case of failure to fulfill export obligation or any other condition of authorization, authorization holder shall be liable for action under FT(D&R) Act, Orders and Rules made there under, provisions of FTP and Customs Act, 1962.

Clubbing of two or more EPCG authorizations of same authorization holder would be permitted.

Total export obligation would be refixed taking into account total of duty saved or total of CIF value of imports.

On clubbing, authorizations for all purposes shall be deemed to be a single EPCG authorization. Export obligation period for clubbed authorization shall be reckoned from first authorization issue-date. However, in cases where clubbed CIF / duty saved value exceeds Rs 100 crore, no corresponding benefit of increase in export obligation period shall be admissible.

Average export obligation for clubbed authorizations would be highest of average export obligations endorsed on individual authorizations so clubbed.

(a) EPCG authorization holder can apply for refixation of export obligation as given in para 5.4 (i) of FTP in ANF 5C.

(b) Deleted.

(c) For all EPCG authorizations, authorization holder should have fulfilled mandated (original or amended) block wise export obligation, till previous block to application date. In all such cases, refixed export obligation would be computed as under: (% export obligation unfulfilled) x (8) x (duty saved on authorization issue-date )

(d) Deleted.

(e) There would be no change in average export obligation fixed or export obligation period of original authorization.

(f) Deleted

Import of refurbished spares shall be permitted under EPCG Scheme.

However such refurbished / reconditioned spares must have a residual life not less than 80% of life of original spare which would be certified by EPCG authorization holder.

The tools imported under EPCG Scheme may be transferred to any of units or group companies of applicant.

Export Incentives

Deemed Export

Other Export Incentives