Frequently Asked Question (FAQ)
Question: We are merchant exporter and we include name and EPCG number of our supporting exporter on shipping bills. Will such exports get benefit of the Incremental Exports Scheme?
Question: We have failed to furnish the installation certificate within six months from the excise authority? Can we seek extension of time for the same?
Answer: Please see the definition of the third party given in paragraph 9.62 of the Foreign Trade Policy. Such shipping bills will be considered as a third party exports and thus will be ineligible for benefit under Incremental Exports Incentivisation Scrip Scheme.
Question: We took an EPCG licence on 30th Jan, 2013 in which we are unable to meet exports and want to complete our obligation by exports of an nate product. Can we do it and if so up to what extent?
An EPCG Authorization holder is required to produce a certificate from the Central Excise Authority, confirming installation of Capital Goods at factory/ premises of authorization holder or his supporting manufacturer(s)/ vendor(s) within six months from date of completion of import. However, extension in time for Installation of Capital Goods upto a maximum period of 18 months from the date of completion of import can be considered by the concerned RA under Public Notice 48 dated 10th Jan, 2014.
Question: The capital goods imported by us for one unit is required to be transferred to other unit for operational issues. Will it be allowed under the scheme?
There was a provision to fulfill EO up to the extent of 50% by alternate product/services during the period 01.04.2008 to 17.04.2013 and therefore, inclusion of alternate products (for export) would be allowed for fulfillment of EO subject to the condition that first 50% of EO shall be fulfilled only by original export product and Average EO will be re-fixed in respect of alternate products as well.
Question: Can we regularize our case of EPCG we imported capital goods with duty saved amount of over Rs 240 Cr with 12 years EO period but we may not be able to meet EO due to change in product demand ?
The transfer of Capital Goods from one unit to their another unit can be allowed by EPCG Committee in DGFT subject to the condition that both the addresses are mentioned in IEC and RCMC and submission of fresh installation certificate is done within 6 months of such transfer.
Question: What are the green technology products for which reduce Export Obligation applies under EPCG Scheme?
While PN 22 Dated 12th August, 2013 talks about regularization of Export Obligation in cases of defaults and may cover your case but CBEC Circular 40/2013 dated 9th Oct,2013 clearly states that cases where export obligation period is yet to be over, are not covered under the Option and thus you may not be eligible for the benefit. You may take up with DGFT.
Question: Can we discharge export obligation under EPCG by selling ITA I products in the domestic market?
Export obligation under EPCG Scheme shall be 75% of the normal export obligation when fulfilled by export of green technology products, namely, equipment for solar energy decentralised and grid connected products, bio-mass gassifier, bio-mass or waste boiler, vapour absorption chillers, waste heat boiler, waste heat recovery units, unfired heat recovery steam generators, wind turbine, solar collector and parts thereof, water treatment plants, wind mill and wind mill turbine or engine, other generating sets - wind powered, electrically operated vehicles – motor cars, electrically operated vehicles – lorries and trucks, electrically operated vehicles – motor cycle and mopeds, and solar cells.
Question: What is export obligation under post export EPCG Scheme and how the same is fixed?
Supply of ITA-1 items to Domestic Tariff Area, provided realization is in free foreign exchange, is considered for meeting the export obligation under EPCG Scheme and thus you can do it.
Question: We are exporter of pickles from South India having exports under EPCG Scheme. Are we entitled to benefit of exemption from average EO under paragraph 5.7.6 (iv) of handbook as our product is an Agriculture Product?
The export obligation under post export EPCG Scheme is equivalent to eighty five percent. (85%) of six times the amount which is the sum of applicable Basic duty of customs, additional duty of customs, Education Cess and Secondary and Higher Education Cess paid on goods imported under the said authorisation, on FOB basis, which is to be fulfilled within an export obligation period of six years from the date of issue of the said authorization. However, additional duty of customs shall not be taken for computation for the purpose of fixation of export obligation when the Cenvat Credit in respect of additional duty of customs has not been taken:
Question: Can we avail benefit of both basic customs duty and Additional Customs duty (ACD) under post Exports EPCG if I am not availing CENVAT. How will the export obligation under EPCG would be fixed under post export EPCG Scheme.
You are exporting a value added product and value added product can’t be classified as agriculture products. Pickles are processed food and not agro products. Hence exemption from the fixation of average obligation for EPCG Authorisation will not be available to you.
Duty credit scrips issued under Post Export EPCG Scheme will be issued only in respect of basic customs duty and will not allow you benefit of ACD, even when you are not availing CENVAT. Since the concession under post exports EPCG is confined to basic customs duty, the Export Obligation shall be fixed with reference to the basic customs duty paid by you. However, you will be required to furnish a certificate from Central Excise regarding non-availment of CENVAT credit. Such certificate from central excise regarding non-availing of CENVAT credit will not be required where the unit is not registered with central excise.
Frequently Asked Questions
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