EPCG LICENSE

[P.V. MANIKANTAN]

Sir

I need to be clarified on the below on purchase products by using EPCG license :-

We are a MACHINE manufacturer and Our Customer is insisting us to supply the machine on EPCG License basis.

They states that, ' ED and Cess would be extra at 10.30% or as applicable at the time of dispatch.As the supply is against EPCG License, Excise Duty draw back can be claimed by our Company directly based on copy of EPCG license, validation letter in favor of indigenous supplier, full payment certificate etc as per the standard format. Excise Duty is therefore NIL as procurement is against EPCG license processed by our Customer. Hence our Customer need not pay Excise Duty while dispatch of equipment and claiming the payment by our Company '.

My question is :-

1) Whether the comments from our Supplier on Excise duty part is correct ? Is it possible, Our Customer need not to pay excise duty ?

2) Whether it is possible to buy products from Indigenous suppliers by using EPCG license ?

3) If, what is the procedure ?

4) Whether ED can be claimed by us if using EPCG license ?

Your immediate reply in this regard is highly helpful to me

Thanking You,

P.V.Manikantan

AI Summary

Manufacturer Seeks Clarification on Excise Duty and Procurement Under EPCG Scheme; Domestic Sales and Refunds Explained A discussion on the EPCG license involved a machine manufacturer seeking clarification on excise duty and procurement procedures under the EPCG scheme. The manufacturer's customer insisted on purchasing machines using the EPCG license, claiming excise duty could be claimed back, making it NIL. Queries were raised about the validity of these claims, procedures for buying from indigenous suppliers, and documentation requirements. Responses from tax consultants clarified that domestic sales under EPCG are possible, and excise duty can be refunded following specific procedures. They advised consulting relevant chapters of the FTP 2009-2014 for detailed guidance.