AI Drafter 
TaxTMI 
TaxTMI 
Export Promotion Capital Goods (EPCG) Scheme
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....sation would be allowed to be sold as scrap/waste on payment of applicable duty by the authorisation holder. (b) An application for amendment in the list of import item(s) including addition(s)/deletion(s), if any, may be filed with RA concerned provided the authorisation is valid for import. The applicant would give justification for seeking such amendment(s) along with fresh nexus certificate from an independent Chartered Engineer. (c) An application for amendment in the list of export item(s) including addition(s)/deletion(s) if any, may be filed with RA concerned provided the Export Obligation period of the authorisation is valid and the CG has nexus with export product. The applicant would give justification for seeking such amendment(s) along with fresh nexus certificate from an independent Chartered Engineer. 5.04 Certificate of Installation of Capital Goods (a) ^1[Authorization holder shall produce, within 3 years from date of completion of import, to the concerned RA. a certificate from the jurisdictional Customs authority or an independent Chartered Engineer, at the option of the authorisation holder, confirming installation of capital goods/spares at factory/....
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....velopment Commissioner. (b) The export obligation period for a unit which converts from EOU/SEZ Scheme to EPCG Scheme would be the same as is available to a direct EPCG Authorisation holder as per paragraph 5.01 of FTP. (c) If a standalone EOU / SEZ unit wishes to de-bond from EOU to EPCG Scheme, there shall be no requirement for maintenance of average export obligation and the unit shall be required to maintain only specific export obligation equivalent to six times of the proportionate duty saved amount of the depreciated value of capital goods for which the Authorisation has been obtained. (d) In case one unit of a firm / company opts to de-bond from EOU to EPCG Scheme, while other unit(s) are DTA units, then the average export obligation in respect of the authorisations issued to the firm / company (other than de-bonding unit) shall remain unchanged and the average EO, after de-bonding of the unit, shall be fixed by excluding the exports made by the de-bonded unit from the total exports of the firm/ company, which runs concurrently for all the units of the firm/ company. In such a case, specific EO equivalent to six times of the proportionate duty saved amount on the d....
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....co-terminous with the validity period of EPCG authorisation. 5.10 Conditions for fulfillment of Export Obligation In addition to conditions in paragraph 5.04 of FTP, the following conditions shall also be applicable for fulfillment of export obligation: (a) Name of the supporting manufacturer as well as the exporter shall be indicated on export documents. (b) In case the Authorisation holder wants to export through a third party, export documents viz., shipping bills/Bill of exports etc. shall indicate name of both authorisation holder and supporting manufacturer, if any, along with EPCG authorisation number. Shipping bill/Bill of Export, GST invoice and e-BRC/ export realisation from RBI's EDPMS should be in the name of third party exporter. The goods exported through third party should be manufactured by the EPCG authorisation holder or the supporting manufacturer where the capital goods imported under the authorisation have been installed. The goods manufactured by the authorisation holder shall be exported as it is by the ultimate exporter (third party exporter) without further processing. Proceeds realised through normal banking channel from third party....
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....ort Obligation, exports counted/being counted for fulfilling specific EO against EPCG Authorisations within valid EO Period (whether original or extended) that have been made in the preceding 3 years will not be taken into account. 5.13 Block-wise Fulfillment of EO (a) The Authorisation holder under the EPCG scheme shall, while maintaining the average export obligation, fulfill the specific export obligation over the prescribed block period in the following proportions: Period from the date of issue of Authorisation Minimum export obligation to be fulfilled Block of 1st to 4th year 50% Block of 5th and 6th year Balance EO (b) The Authorisation holder would intimate the Regional Authority on the fulfilment of the export obligation, as well as average exports, within three months of completion of the block. (c) ^3[Request for extension of Export Obligation period of first block shall be submitted within 6 months from the date of expiry of first block EO period along with composition fee as under :- Duty Saved value of EPCG Authorisation issued Composition fee to be levied (in Rupees) Up to Rs. 2 Crores 5,000 More than Rs. 2 Crores to 10 Cr....
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....Para 5.13 of the Handbook of Procedures (HBP), 2023, in respect of EPCG Authorisations where the Block-wise Export Obligation (EO) period (whether original or as extended) is expiring during the period 01.03.2026 to 31.05.2026, the concerned Block-wise EO period shall stand automatically extended up to 31.08.2026.] ^7[5.14 Report for EO fulfillment Authorisation holder shall submit to RA concerned a report on fulfilment of export obligation through online mode after expiry of first block period of four years and continuously till the expiry of valid EO period. Such report shall contain a statement with details of Shipping bill/Invoice number/Bill of Export/FIRC number with date and number, as applicable, duly certified by Chartered Accountant/Cost Accountant/ Company Secretary for evidencing fulfillment of specific as well as average EO (wherever applicable).] 5.15 Automatic Reduction/Enhancement upto 10% Duty saved amount and pro rata Reduction/Enhancement in export obligation If authorisation issued has been utilized for import of goods:- (a) In excess of duty saved amount indicated on the authorisation by not more than 10%, the authorisation shall be deemed ....
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....g sub-para (a) above, sub-paras (b) and (c) above shall also be applicable for authorisations issued under FTP (2015-20). ^6[(e) For implementation of all PRC decisions involving levy of Composition Fee while allowing extension in block-wise/EO period and/or regularisation of exports already made, the applicable Composition Fee shall be as under :- Duty Saved value of EPCG Authorisation issued Composition fee to be levied (in Rupees) Up to Rs. 2 Crores 30,000 More than Rs. 2 Crores to 10 Crores 60,000 Above Rs. 10 Crores 1,00,000 No refund of earlier paid Composition Fee shall be admissible.] ^9[(f) Notwithstanding the provisions contained in Para 5.16 of the Handbook of Procedures (HBP), 2023, in respect of EPCG Authorisations where the original or extended Export Obligation (EO) period is expiring during the period 01.03.2026 to 31.05.2026, the EO period shall stand automatically extended up to 31.08.2026.] 5.17 Relief in Average Export Obligation (a) To provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5% as compared to the previous year, average export obligation fo....
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....e (a) Authorisation holder shall have the option to surrender the unutilised authorisation at any point of time. In such cases no penalty or fees shall be levied. (b) In case, EPCG authorisation holder fails to fulfill prescribed export obligation, he shall pay customs duty/taxes/cess in proportion of shortfall in export obligation along with applicable interest as prescribed by Customs Authority. Such facility can also be availed by EPCG authorisation holder to exit at his option. (c) In case of domestic sourcing of capital goods through invalidation letter/ARO, the duties, taxes and cess payable shall be with reference to the notional Customs duties/taxes/cess saved on the FOR value of capital goods (including spares, jigs, fixtures, dies and moulds). (e) Authorisation holder can also provisionally pay duty and interest suomoto on the basis of self/own calculation as per the procedure specified in paragraph 4.50 of HBP. 5.22 Maintenance of Records Every EPCG authorisation holder shall maintain, for a period of 2 years from date of redemption, a true and proper account of exports/ supplies made and services rendered towards fulfillment of export obligation. 5.....
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.... be permitted during valid EOP including extended period, if any. However, clubbing in case of all authorisations where EO period is over may be allowed for regularisation purposes provided they have been issued under same policy period. (g) In case of clubbing of EPCG authorisations where EO can be fulfilled by export of alternate product(s)/service(s), the proportion of alternate product(s)/service(s) for EO fulfillment/ regularization will be restricted to the lowest of the percentage of alternate product(s)/service(s) allowed in the clubbed authorisations. (h) EPCG authorisations issued prior to 01.04.2007 shall be governed by provisions contained in Chapter 5 of HBP Vol.1 (RE-2006).The EPCG Authorisations issued between 01.04.2007 and 17.04.2013 shall be governed by provisions contained in Chapter 5 of HBP Vol.1 (RE-2012, as amended). The EPCG Authorisations issued from 18.04.2013 till the issue of notification of HBP 2015-20 shall be governed by provisions contained in Public Notice No.1 dated 18.04.2013. The EPCG Authorisations issued between notification of HBP 201520 till the notification of HBP 2015-20 (RE-2017) shall be governed by provisions contained in HBP 2015-....
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.... as, "(b) In the case of import of spares, the installation certificate shall be submitted by the Authorisation holder within a period of three years from the date of import." 3. Substituted vide Public Notice No. 15/2024-25 dated 25-07-2024 before it was read as, "(c) Request for extension of Export Obligation period of first block shall be submitted within 6 months from the date of expiry of first block EO period along with composition fee of 2% on duty saved amount proportionate to unfulfilled portion of EO pertaining to the block. RA may consider the request for extension of block wise EO period, received after 6 months, but within 6 years from date of issue of authorisation, with a late fee of Rs. 10,000/- per authorisation. Application made beyond 6 years, for extension of block-wise EO period for regularization purpose, shall also be considered by RA concerned, with an additional late fee of Rs. 5,000/- for each year per authorisation. This late fee is in addition to the composition fee that may be payable on account of shortfall in export obligation. Where EO of the first block is not fulfilled in terms of para (a) above, excep....