EPCG benefits on In-house manufacture Capital Items

[BRIJMOHAN GOYAL]

A Heavy Electricals manufacturing company 'A ' is under expansion under Capacity Augmentation and Some equipment to be manufacture inside the factory as Capital items for their test labs. For this purpose, some of Raw material & Components to be Import from overseas vendors and some of them from Indigenous source with CIF content . The Capital Equipment, in house manufacture , will be used for testing of Transformers for Export orders and Deemed Export orders. My query as:-

(1) In-House Capital item can be covered under EPCG scheme.

(2) Benefits on Raw material & Components is available under EPCG licence.

(3) For Export obligation, Value of Imports or cost of equipment , which will be considered.

Regards,

BM Goyal

from manufacture Transformer in their plant with import of Raw material & Components for their Test Lab .

AI Summary

EPCG Scheme Clarification: In-house Manufactured Capital Items' Eligibility and Export Obligation Calculation Explained. A heavy electricals manufacturing company is expanding its capacity and plans to manufacture some capital items in-house for testing transformers related to export orders. The company seeks clarification on whether these in-house manufactured capital items qualify under the EPCG scheme, if benefits on raw materials and components are available under the EPCG license, and whether the value of imports or equipment cost is considered for export obligations. In response, it was suggested that imported raw materials could be sourced against an Advance Authorization (AA) without incurring duties.