EPCG LICENSE

[Asked by Guest]

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

EPCG licence procurement: invalidation letter enables supplier relief from excise at supply, with refund procedures available under FTP.
Procurement of capital goods for an EPCG licence holder from an indigenous supplier requires a DGFT invalidation/validation letter; suppliers should ordinarily account for Central Excise Duty on sales invoices, and where duty is paid either party may seek refund or relief of Terminal Excise Duty by following HBP Vol. I and FTP procedures. Core documents include the EPCG licence copy, DGFT invalidation/validation letter, and a full payment certificate; deemed export documentary requirements and licence validity/extension follow FTP Chapter 4 and HBP guidance.