EXPORT OBLIGATION FULFILL MENT (EO)

[SNEHAL SHAH]

Sir,

We had purchase all New machinery under EPCG Scheme , now some guideline require from you that due to some less export oreder received last 1 1/2 Years due to some internation market competition , we are unable to fulfillment export obligation .

Now quetion is that 3 to 4 Machinery purchase under 3% & 5% Concession rate of duty under EPCG & there is one or two months pending for completion of block period ( 8 Years to be completion on oct-2011 ) is it we apply for extenton for EO fulfillment ?

Please guide to us

sachin

 

[YAGAY andSUN]

You may apply for extension of time period for fulfillment of export obligation but such extesion is coupled with  penalty of 2%.

[SNEHAL SHAH]

Sir,

Penalty of 2% for non fulfillment of Export obligation or Saved Custom duty Please clear .

 

Regards,

SACHIN

[YAGAY andSUN]

Dear Sir,

Extension for fulfilment of export obligation upto two years can be obtained from RA on payment of composition fee of 2% of proporttionate duty saved amount on unfulfilment obligation or an enhancement of total export obligation by 10%, at the choice of exporter, for each year of extension sought.  Such first extension of Export Obligation cab be maximum period of two years - para 5.11 of HBP Vol. 1 2009-14.

Further, extension of export obligation beyond 8+2 year can be considered for a further period of two years with condition that 50% of duty payable in proportion to unfulfilled export obligation is paid to customs - para 5.11 of HBP Vol. 1 2009-14 - MF (DR) Circular no 16/2006-Cus dated 09-05-2006.

This is for your kind information.

Best Regards.

Pradeep Khatri

 

AI Summary

Extension Possible for EPCG Scheme Export Obligation with Penalty; Options Include Composition Fee or Increased Obligation A user inquired about extending the export obligation under the EPCG Scheme due to reduced export orders. They sought guidance on whether an extension could be applied for, given the pending block period completion. A respondent advised that an extension is possible, subject to a 2% penalty on the proportionate duty saved for each year of extension. The extension can be for up to two years, with options to pay a composition fee or increase the total export obligation by 10%. Further extensions beyond the initial period require additional conditions, including partial duty payment.