export obligation issue

[harkirat singh]

Dear Sir,

We have imported Off Set Printing machine under EPCG. 

But we are not exporting printed items. Kindly advice how to complete export obligation.

Kindly suggest a way out.

Regards

Harkirat Singh

[YAGAY and SUN]

Dear Harkirat,

Import of capital goods under EPCG scheme without having any export projections or not exporting any goods for fulfilling  the export obligation would certainly attract the Revenue Department attention.  If you cannot fulfill the export obligation then in our opinion it would be better to pay the duty along with interest without loosing any further time.

If export is not possible then  deemed exports as specified in paragraph 8.2 (a), (b), (d), (f), (g) & (j) of FTP shall also be counted towards fulfillment of export obligation, along with usual benefits available under paragraph 8.3 of FTP.

For details please check chapter 5 of the FTP read with HBP Vol.1 in this regard.

Regards,

Team YAGAY & SUN

(Indirect Tax Consultants)

[Mahir S]

Shipments under Advance Authorization, DFRC, DFIA, or Drawback scheme, or incentive schemes under Chapter 3 of FTP; would also count for fulfilment of EO under EPCG Scheme.

However, if export obligation cannot be fulfilled, then pay up the duty and interest thereon immediately, as already explained above.

AI Summary

Export obligation under EPCG: deemed exports and specified incentive shipments may satisfy it, otherwise duties and interest apply.
Import of capital goods under the EPCG scheme creates a binding export obligation that may be met by specified deemed exports listed in paragraph 8.2 and benefits under paragraph 8.3, or by qualifying shipments under Advance Authorization, DFRC, DFIA, Drawback, or Chapter 3 incentive schemes of the Foreign Trade Policy; if these routes are unavailable, pay applicable duties with interest to regularize the obligation.