404,Navjivan Bldg, 121/127 Kazi Syed St,Masjid (W), Mumbai - 400 003,India
Tel : 2345 38 38 & 2346 38 38 Fax : 91 22 2345 3737 M : 9820034262
Web : impexsolution.com
Email : firstname.lastname@example.org
To : Indian Registered Exporter
Sub : Imports of Machineries at 5%
Custom Duty under
Export Promotion Capital Goods Scheme(E.P.C.G. Scheme
FOB Basis EO Period : 5 times CIF Value of capital Goods in
NFE Basis EO Period : 4 times CIF Value of Capital Goods in
New Capital goods can be imported including
computer software systems with a licence under the Export
Promotion Capital Goods (EPCG) Scheme by , Manufacturer exporters
with or without supporting Manufacturer,Vendor, Merchant exporters
tied to supporting manufacturer and service providers are
eligible to import capital goods. The capital goods imported
by the licence holder shall be installed at the factory of
the licence holder or his supporting manufacturer(s)/ vendor(s).Details
Capital goods (CG), including jigs, fixtures,
dies, moulds and spares upto 20% of
the CIF value of the capital goods may be imported at 5% Customs
to an export obligation equivalent to 5 times CIF value of
capital goods on FOB
basis or 4 times the CIF value of capital goods on NFE basis
to be fulfilled over a
period of 8 years reckoned from the date of issuance of licence.
||5% on CIF
||5 Times CIF
||4 Times CIF
1 The export obligation shall be fulfilled by the export of
goods manufactured or produced by the use of the capital goods
imported under the scheme. The export obligation may also
be fulfilled by the export of same goods, for which EPCG licence
has been obtained, manufactured or produced in different manufacturing
units of the licence holder/specified supporting manufacturer/vendor
2 The exports shall be direct exports
in the name of the EPCG licence holder.
However, the export through third party(s) is also allowed
provided the name of the EPCG Licence holder is also indicated
on the shipping bill. If a merchant exporter is the importer,
the name of the supporting manufacturer shall also be indicated
on the shipping bills. At the time of export, the EPCG licence
No. and date shall be endorsed on the shipping bills which
are proposed to be presented towards discharge of export obligation.
3 Export proceeds shall be realised in
freely convertible currency.
4 Physical as well as Specified Deemed
Exports shall be taken into
5 Import of capital goods shall be subject
to Actual User condition till the export obligation is completed.
6 The Export obligation shall be in addition to any other
undertaken by the importer and shall be over and above the
average level of exports of the same products achieved by
him in the preceding 3 years provided, however that if the
exporter achieves an export of 75% of the annual value of
the production of the export product , the export obligation
under this scheme would be subsumed under that export.
7 Agricultural exporters and service providers shall be allowed
to shift the capitalgoods, provided advance intimation is
given to the concerned Assistant Commissioner of Customs and
Excise. Such equipments shall not be sold or leased by the
8 If the licence issued under the scheme
has actually been utilised for import of a value in excess
of or less than 10% of the CIF value of the licence, license
shall be deemed to have been enhanced/ reduced by that proportion.
Export obligation shall accordingly be enhanced/ reduced as
per the actual utilization of the licence.
9 A person may apply for a licence under
the EPCG scheme to import the capital goods in dis-assembled/
un-assembled condition to be assembled into capital goods
by the importer or components of such capital goods required
for assembly or manufacture of capital goods by the importer.
This facility shall not be available for replacement of parts.
10 Exchange Fluctuation of 10% of cif
value is being permitted automatically with
corresponding enhancement / reduction in export obligation.
exporter will not have to come to DGFT for seeking such enhancement
reduction in cif value time and again.
11 A person holding an EPCG licence may
source the capital goods from a domestic manufacturer instead
of importing them. In the event of a firm contract between
parties for such sourcing, the domestic manufacturer may apply
for EPCG licence under the scheme for the import of components
required for the manufacture Of the said capital goods.
The domestic manufacturer may also replenish the components
after supply of capital goods to the EPCG licence holder.
The export obligation relating to the EPCG licence shall be
reckoned with reference to the CIF value of the licence actually
utilised. Benefits to Domestic Supplier
The domestic manufacturer supplying capital goods to EPCG
licence holder shall not be entitled to claim following benefits
in respect of deemed exports
A Advance Licence for intermediate supply/deemed export
B Deemed Export Drawback
C Refund of terminal excise duty
Please give following Details/Documents
to enable us to process your application.
If you have any queries, please feel free
to call or fax us.
Bigis Impex Consultancy,