TaxTMI 
TaxTMI 
Concessional duty of 5% on Capital goods, components and spares imported under the EPCG Scheme - EXIM Policy 2002-07 - duty saved criteria
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....:- (1) that the goods imported are covered by a valid licence issued under the Export Promotion Capital Goods (EPCG) Scheme in terms of Chapter 5 of the Export and Import Policy permitting import of goods at the rate of five percent duty and the said licence is produced for debit by the proper officer of customs at the time of clearance: Provided that for import of spare parts specified at Sr.No.4 of the said Table, the validity period of the licence shall be deemed to be the period permitted for fulfilment of the export obligation in full; (2) that the importer executes a bond in such form and for such sum and with such surety or security as may be specified by the Deputy Commissioner of Customs or Assistant Commissioner of Customs binding himself to fulfil export obligation on FOB basis equivalent to eight times the duty saved on the goods imported as may be specified on the licence, or for such higher sum as may be fixed by the Licensing Authority, within a period of eight years from the date of issue of licence, in the following proportions, namely:- S.No. Period from the date of issue of licence Proportion of total export obligation 1 ....
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....f Customs or Deputy Commissioner of Customs having jurisdiction over the importer's factory or premises, as the case may be, is produced confirming installation and use of the capital goods in the importer's factory or premises, within six months from the date of completion of imports or within such extended period as the said Assistant Commissioner of Customs or Deputy Commissioner of Customs referred to in condition (2) above may allow:] Provided that in the case of,- (i) manufacturer exporter and merchant exporter having supporting manufacturer (s) or vendor(s); (ii) import of irrigation equipment for use in contract farming for export of agricultural products; and (iii) importer rendering services; the capital goods may be installed at the factory or premises of such other person whose name and address are endorsed on the licence referred to in condition (1) and where the bond for full difference of duty, if necessary, in terms of condition (2), with a bank guarantee is executed by the importer and such other person binding themselves jointly and severally to fulfil the export obligation and all other conditions of this notification ....
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....ovided that in respect of sick units as specified in the second proviso to condition (2) above, extension of overall period of export obligation shall not be allowed. 3. Where the goods specified in the said Table are found defective or unfit for use, the said goods may be re-exported back to the foreign supplier within 3 years from the date of payment of duty on the importation thereof: Provided that at the time of re-export, the goods are identified to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs as the goods which were imported. 4. where the total exports of a sector or product group during the year 2007-08 has declined by more than 5% as compared to the year 2006-07, the average export obligation of the licencee for 2007-08 may be reduced proportionate to the reduction in exports of that particular sector /product group during 2007-08 as against 2006-07. ^1[5. In a case of default in export obligation, when the duty on goods is paid to regularise the default, the amount of interest paid by the importer shall not exceed the amount of duty if such regularisation has been dealt in terms of Public Notice of the Government o....
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....holder by exporting the same product and in such cases, inter-alia the Shipping bills shall indicate name of both the third party and the licence holder; or (d) making supplies of same product in terms of sub- paragraphs (a) (b) (d) (e) (f) (g) (h) (i) and (j) of paragraph 8.2 of the Export and Import Policy; or (e) export of other goods manufactured by the importer; (ii) in relation to importers rendering services, means, receiving payments in freely convertible foreign currency for services rendered through the use of capital goods. Provided that in respect of units holding license both as manufacturer exporter and service provider, the export obligation may be fulfilled either by export of products specified in clause (i) or by receiving payments in freely convertible foreign currency for services rendered through the use of such capital goods. Provided further that in respect of group companies as defined in the Companies Act, 1956 (1 of 1956), where licence has been issued to any one of the group company, the export obligation may also be fulfilled by export of any goods/services by any other company(s) belonging to the said group: ....