Export obligation for export made by holding Company for the license hold by subsidary company

[Abhijeet Mane]

A subsidiary company is availing EPCG benefits. The product manufactured using the EPCG machinery is not exported by the subsidiary. However, the holding company operates from the same premises and uses the same machinery. The holding company manufactures the product and exports it.

In this scenario, will the export obligation under EPCG be considered as fulfilled based on exports made by the holding company, and will the EPCG benefits continue to remain available?

AI Summary

Holding company exports under EPCG may not discharge subsidiary export obligation without supporting manufacturer or group company endorsement.
Under the EPCG scheme the export obligation must be discharged by the EPCG authorisation holder unless a holding or other entity is expressly recognised on the authorisation as a supporting manufacturer or group company; third party exports count only if goods are manufactured by the authorisation holder or recognised supporting manufacturer and specified shipping, invoicing and export realisation compliances are met, otherwise EO will not be treated as fulfilled and benefits may be denied or recovered.