Annual Average of Past Export performance

[Mohammed Idrees]

Dear Experts,

I would like seek help for an EPCG issue as explained below:

We have obtained an EPCG Authorization under Concessional Duty 3% in 2011 (Duty Saved value ₹ 20,22,699) and completed our Export Obligation for the Fixed EO (Rs.1,61,81,592) during the year 2016-2017 thru Third Party Exports as we had no direct export orders and had to opt for 3rd Party Exports. We have complied with the conditions as per PARA 5.10(d)2015-20 but we are not able to maintain the Annual Average of past export performance for the same (past 3 years export performance). The Annual Average of Export performance is ₹ 28,17,820 /-

How do we regularize the same and what would be the duty towards the non fulfillment of AA Export performance ?

[YAGAY andSUN]

You would be required to pay the compounding fees as mantioned in chapter 5 of the FTP read with HBP Vol. 1

[Kishan Barai]

Few points are needed to be taken into consideration based on your query

1. Annual Average Export Performance should take a performance of preceding 3 financial years.

2. For EPCG, exports should be with your IEC only or If merchant exporter's IEC used for the transaction then in shipping bill your EPCG number & supporting manufacturer should be mentioned.

3. For AA you need to do VA of 15% & For EPCG x6 in 6 years #FOB.

AI Summary

Annual Average Export Performance compliance requires multi-year calculation and possible compounding fees for EPCG shortfall. Guidance on EPCG compliance where Fixed Export Obligation was met via third party exports but the Annual Average Export Performance based on the preceding three financial years was not maintained; exports must be under the applicant's IEC or under a merchant exporter's IEC with the EPCG number and supporting manufacturer noted in the shipping bill. Shortfalls or procedural non compliance may be regularised by payment of compounding fees under the FTP and Handbook of Procedures, and attention must be given to value addition and EPCG specific multipliers during the entitlement period.