Need advice on EPCG SEO and AEO Fulfilment

[Pralhad Jadhav]

Dear Experts, please guide me through the following query:

The EPCG license period is complete.

1. There are certain shipping bills on which duty drawback benefit has been availed however, EPCG license reference is not present. At the time of redemption, can I request the RA to consider such shipping bills towards the EPCG license which was inadvertently not mentioned therein.

2. I have completed my Specific Export Obligation (SEO) in the first year itself, however throughout six years except one year I have not satisfied my Average Export Obligation (AEO). In such a situation, will it mean that I will have to pay 100% percent of the actual duty saved amount or only proportionate of sum of balance SEO+AEO that is not fulfilled.

3. The shipping bills on which drawback benefit has been claimed but no license number is mentioned, can it be used to fulfill the AEO of two EPCG Licenses.

Thanks in Advance. 

[Venkata K]

Dear Sir 

Answer for your first question is "NO" license no is must in the shipping bill for fulfilment of Specific Export Obligation. If possible please explore revision of Shipping bills. 

Answer for your Second question: please check Sum of all fiver years export value is equal or greater than Average export obligation fixed by DGFT of a year x 6 years. Further please check whether Average export obligation value mention in the license is correct or not, in case of any correction you can apply for correction. 

Answer for third question: Shipping bills used for average export obligation cannot be used for Specific export obligation.

[YAGAY andSUN]

SB without EPCG reference

May be allowed at RA discretion with justification

Drawback claimed

May require refund/adjustment

SEO completed but AEO failed

Proportionate duty + interest on shortfall

Same SB for two licenses

Not allowed

[YAGAY andSUN]

Practical Suggestions

Before filing redemption:

1. Prepare a detailed reconciliation statement:

   • License-wise exports

   • SEO vs AEO calculation

   • Shortfall year-wise

2. Take CA certification.

3. If AEO shortfall exists, compute proportionate duty yourself and be ready to regularize.

4. Make a well-drafted submission to RA explaining facts transparently.

[Shilpi Jain]

You would have to apply for amendment of the SB to get the license number added. If not request the officer to consider them towards this EPCG.

DBk is not restricted for goods exported for fulfilment of EPCG export obligation.

Pls prepare a reco of the total exports and then consider whether SEO and AEO satisfied. How can you satisfy SEO without AEO. You have to fulfill the AEO in each year.

AI Summary

EPCG compliance: ensure licence numbers on shipping bills or amend them, reconcile exports and regularize any AEO shortfall. EPCG redemption requires shipping bills to show the licence number or an amendment/RA justification; drawback does not bar using exports for EPCG but may require adjustment; SEO and AEO are separate obligations-AEO shortfalls attract proportionate duty plus interest; the same shipping bill cannot be used for multiple licences or to satisfy both SEO and AEO for different licences. Prepare licence-wise reconciliations, CA certification, compute shortfalls, and submit a detailed request to the RA.