epcg obligation

[satbir singhwahi]

pary has imported knitting machines under EPCG.NOW IT IS FULFILLING EXPORT OBLIGATION THROUGH THIRD PARTY, THE THIRD PARTY IS EXPORTING WOVEN GARMENTS BY MENTIONING THE EPCG NO. OF US UNDER WHICH KNITTING MACHINERY WAS IMPORTED.WHETHER EXPORT OBLIGATION CAN BE FULFILLED BY EXPORTING PRODUCT THAT IS NOT MANUFACTURED ON IMPORTED MACHINE UNDER EPCG.

[Rama Krishana]

From the query it appears that, some thing is wrong somewhere. One of the important condition under EPCG is that, "Import of capital goods shall be subject to Actual User condition till export obligation is completed." In your case, there is no actual use of machinery imported under EPCG, you may be under some difficulty in future. There is no such permission of this kind under FTP.

AI Summary

Actual user condition: EPCG importers must use imported capital goods; third-party exports cannot discharge the export obligation. Import of capital goods under the EPCG scheme is subject to the Actual User condition until the export obligation is completed, requiring the importer to actually use the imported machinery in production for exports; exports by a third party of goods not produced on the imported machines do not discharge the importer's EPCG export obligation and are not permitted under the Foreign Trade Policy.