The Export Promotion Capital Goods (EPCG) scheme is a pivotal initiative that empowers exporters to import capital goods, encompassing spares for pre-production, production and post-production phases at a remarkable advantage - zero customs duty. This scheme plays a crucial role in facilitating and incentivizing international trade by providing exporters with a strategic tool to enhance their productivity and competitiveness.
Overview of Export Promotion Capital Goods (EPCG) Scheme:
To increase and improve the manufacturing quality of Indian goods in international markets, the Export Promotion Capital Goods (EPCG) scheme was introduced. The scheme enables exporters to import capital goods that can be used to produce high-quality final products to be exported from India. Through EPCG scheme, exporters can export goods like spare parts for pre-production, production and post-production at zero customs duty.
The core objective of the EPCG Scheme is to bolster the competitiveness of Indian exports by streamlining the import of capital goods essential for the production of goods and services.
Furthermore, it seeks to stimulate increased investments in the manufacturing sector, thereby contributing to the overall growth and dynamism of the industrial landscape of nation. In essence, the EPCG Scheme stands as a key driver for advancing the capabilities and global standing of Indian businesses through strategic import facilitation and industry advancement.
Benefits of Export Promotion Capital Goods (EPCG) Scheme:
To increase and improve the manufacturing quality of Indian goods in international markets, the Export Promotion Capital Goods (EPCG) scheme was introduced. The scheme enables exporters to import capital goods that can be used to produce high-quality final products to be exported from India. Through EPCG scheme, exporters can export goods like spare parts for pre-production, production and post-production at zero customs duty.
The core objective of the EPCG Scheme is to bolster the competitiveness of Indian exports by streamlining the import of capital goods essential for the production of goods and services.
Furthermore, it seeks to stimulate increased investments in the manufacturing sector, thereby contributing to the overall growth and dynamism of the industrial landscape of nation. In essence, the EPCG Scheme stands as a key driver for advancing the capabilities and global standing of Indian businesses through strategic import facilitation and industry advancement.
Fees:
For a customized and attractive quotation, please contact with your product details to Rekha Atri (+91 98118 03136) or Manju Laur (+91 9711994042).
Process to apply for Export Promotion Capital Goods (EPCG) Scheme:
To avail the benefits of the EPCG Scheme, an exporter must apply to the DGFT in the prescribed format along with the necessary documents including a copy of the IEC, a copy of the export-import license, a copy of the project report and a copy of the proforma invoice of the capital goods to be imported.
- Register with the licensing authority Director General of Foreign Trade (DGFT) or log into your account.
- Select Services -> Online E-com application.
- Select EPCG.
- Fill in the relevant information and upload the supporting documents.
Submit your application.
Eligibility Criteria for the EPCG Scheme:
To be eligible for the EPCG Scheme, an exporter must meet the following criteria:
- Manufacturer Exporter or Tied Merchant Exporter: The exporter should either be a manufacturer exporter or a merchant exporter closely affiliated with a supporting manufacturer.
- Valid Import Export Code (IEC): Possession of a valid Import Export Code (IEC) issued by the Director General of Foreign Trade (DGFT) is a prerequisite.
- Compliance with Exporter Lists: The exporter should not feature in the Negative List of Exporters and should steer clear of the caution list maintained by the Reserve Bank of India (RBI).
- Minimum Export Turnover: The exporter must demonstrate a minimum export turnover of Rs. 01 crore in the preceding year, showcasing an established track record in international trade.
- Remaining Export Obligation: A critical requirement is that the exporter should maintain a minimum remaining export obligation, equivalent to 1.5 times the duty saved amount on the capital goods imported under the scheme.
Frequently Asked Questions
The Export Promotion Capital Goods (EPCG) Scheme is a government initiative that allows exporters to import capital goods (machinery, equipment etc.) at a concessional or zero customs duty rate. The purpose of this scheme is to facilitate and incentivize exports by enabling manufacturers to upgrade their production capabilities, thereby enhancing the quality and competitiveness of Indian goods in the global market.
The key benefits of the EPCG Scheme include:-
• Duty Savings: Significant reduction or elimination of customs duty on the import of capital goods.
• Technological Upgradation: Facilitates the modernization and technological advancement of export-oriented industries.
• Enhanced Competitiveness: Improves the quality and efficiency of production, making Indian goods more competitive internationally.
• Increased Exports: Encourages export growth by providing access to advanced machinery and equipment.
The EPCG Scheme is generally available by:-
• Manufacturer exporters (with or without supporting manufacturers).
• Merchant exporters tied to supporting manufacturers.
• Service providers.
Specific eligibility criteria and conditions may apply, so it's essential to refer to the latest Foreign Trade Policy (FTP) guidelines.
Capital goods allowed for import under the EPCG Scheme typically include:-
• Plant, machinery, equipment and accessories required for the production of export goods.
• Spares, tools, jigs, fixtures and dies.
• Packaging machinery and equipment.
• Capital goods for services.
Certain restrictions and conditions may apply to specific types of capital goods.
A crucial aspect of the EPCG Scheme is the Export Obligation (EO). This is the condition that the exporter must fulfill by exporting goods manufactured or services rendered using the imported capital goods. The EO is typically linked to the amount of duty saved on the imported goods and must be met within a specified timeframe.
The general application process for the EPCG Scheme involves:-
1. IEC Code: Ensuring a valid Import Export Code (IEC) is in place.
2. Application to DGFT: Preparation and summation of the application to the Directorate General of Foreign Trade (DGFT) as per the prescribed format.
3. Documentation: Providing all necessary documents including proforma invoices, project reports etc.
4. License Issuance: Obtaining the EPCG license from the DGFT.
5. Import of Capital Goods: Importing the capital goods as per the license conditions.
6. Installation and Use: Installing and utilizing the capital goods for export production.
7. Export Obligation Fulfillment: Meeting the stipulated export obligation within the specified period.
8. Redemption: Applying for the closure of the EPCG license upon fulfilling the EO.
iKargos provides comprehensive support to help exporters navigate the complexities of the EPCG Scheme including:-
• Guidance and Consultation: Providing expert advice on eligibility, documentation and procedures.
• Application Assistance: Assisting with the preparation and filing of the EPCG application.
• Documentation Support: Helping to compile and organize the necessary paperwork.
• Liaison with Authorities: Facilitating communication with the DGFT and other relevant authorities.
• Compliance Support: Ensuring adherence to all scheme requirements and obligations.
The fees for iKargos EPCG Scheme services are customized based on the specific requirements and complexity of your application. Please contact our team of experts for a detailed quotation:-
* Rekha Atri: +91 98118 03136.
* Manju Laur: +91 9711994042.
iKargos offers:-
• Expertise: In-depth knowledge of the Foreign Trade Policy and EPCG Scheme regulations.
• Efficiency: Streamlined processes to minimize delays and ensure timely approvals.
• Personalized Service: Tailored solutions to meet your specific needs.
• Reliability: A trusted partner committed to your export success.
For the most accurate and up-to-date information, you should refer to the official publications of the Directorate General of Foreign Trade (DGFT) and the Foreign Trade Policy (FTP) documents.
