EPCG Scheme under FTP 2004-2009
Note: Special CVD of 4% is not
leviable on import under EPCG Scheme [Ref: CBEC Circular 18/05.06.2006]
Last amendment
72/21.05.2007; 65/09.05.2008]
Ntfn 97 In
exercise of the powers conferred
17.09.2004 by sub- section (1) of
section 25 of
the Customs Act, 1962
(52 of 1962), the Central Government, being satisfied that it is necessary in
the public interest so to do, hereby exempts goods specified in the Table
annexed hereto, from,-
(i) so
much of the duty of customs leviable thereon which is specified in the First
Schedule to the Customs Tariff Act, 1975 (51 of 1975) as is in excess of the
amount calculated at the rate of five per cent ad-valorem, and
(ii) the
whole of the additional duty leviable thereon under section 3 of the said
Customs Tariff Act, when specifically claimed by the importer.
2. The exemption under this
notification shall be subject to the following conditions, namely:-
(1) that the goods imported are covered by a valid
licence or a valid authorisation issued under the Export Promotion Capital
Goods Scheme in terms of Chapter 5 of the Foreign Trade 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
S.No.4 of the said Table, the validity period of the licence shall be deemed to
be the period permitted for fulfillment 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 authorisation, or for such higher sum as may
be fixed by the Licensing Regional 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) |
(2) |
(3) |
|
1. |
Block of 1st to 6th year |
50% |
|
2. |
Block of 7th to 8th year |
50%: |
Provided that where the duty saved is not less than
Rs.100 crores, or where the licence is issued to units in the agri export zone
as may be notified by the licensing authority, the export obligation shall be
fulfilled within a period of twelve years from the date of issue of licence in
the following proportions, namely:-
|
S No |
Period from the date
of licence |
Proportion of total
export obligation |
|
(1) |
(2) |
(3) |
|
1. |
Block of 1st to 10th year |
50% |
|
2. |
Block of 11th and12th year |
50% |
Provided
further that where a sick unit is notified by the Board for Industrial and
Financial Reconstruction or where a rehabilitation scheme is announced by the
concerned State Government in respect of sick unit for its revival, the export
obligation may be fulfilled in terms of Paragraph 5.5.1of the Foreign Trade
Policy:
Provided also that where the capital goods are
imported by agro units and units in tiny and cottage sector, the
export obligation shall be fixed equivalent to 6 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 12 years from the
date of issue of the licence. [Inserted by 46/17.05.2005; 72/21.05.2007]
Provided also that where the capital goods are
imported for technological upgradation or by small industry units as defined in
paragraph 5.1 of the Foreign Trade Policy, as the case may be, the export
obligation shall be fixed equivalent to six 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; [Amended by 46/17.05.2005]
Provided also that export obligation of a particular block
may be set off against the excess exports made in the said preceding block;
(3) that if
the importer does not claim exemption from the additional duty leviable under
section 3 of the Customs Tariff Act, 1975, the additional duty so paid by him
shall not be taken for computation of the net duty saved for the purpose of
fixation of export obligation provided the Cenvat credit of additional duty
paid has not been taken; [Amended by Ntfn 27/02.03.2005]
(4) that the importer produces within 30 days from the
expiry of each block from the date of issue of licence or within such extended
period as the Deputy Commissioner of Customs or Assistant Commissioner of
Customs may allow, evidence to the satisfaction of the Deputy Commissioner of
Customs or Assistant Commissioner of Customs showing the extent of export
obligation fulfilled, and where the export obligation of any particular block
is not fulfilled in terms of the preceding condition, the importer shall within
three months from the expiry of the said block pay duties of customs of an
equal amount equal to that portion of duties leviable on the goods, but for the
exemption contained herein which bears the same proportion as the unfulfilled
portion of the export obligation bears to the total export obligation together
with interest at the rate of 15per cent per annum from the date of clearance of
the goods;
(4A) where the
importer fulfils 75% or more of the export obligation as specified in condition
(2) within half of the period specified for export obligation as mentioned in
condition (2), his balance export obligation shall be condoned and he shall be
treated to have fulfilled the entire export obligation. [Inserted by
46/17.05.2005]
(5) that the
capital goods imported, assembled or manufactured are installed in the
importer’s factory or premises and a certificate from the jurisdictional Deputy
Commissioner of Central Excise or Assistant Commissioner of Central Excise, as
the case may be, is produced confirming installation and use of 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 Deputy Commissioner
of Customs or Assistant Commissioner of Customs, as the case may be, may allow
:
Provided that
if the importer is not registered with central excise or if he is a service
provider, as the case may be, he may produce said certificate of installation
and usage issued by an independent chartered engineer: [Amended by
46/17.05.2005]
Provided further 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 or without a bank guarantee,
as the case may be, 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 and to pay duty with interest at the rate of 15
per cent per annum in case of default;
Provided also that agro units located in Agri Export
Zones or service providers in Agri export Zones may move the capital goods
within the Agri Export Zones under intimation to the jurisdictional Deputy
Commissioner of Central Excise or Assistant Commissioner of Central Excise, as
the case may be, subject to the condition that the importer shall maintain
accurate record of such movement.
(6) that the
imports and exports undertaken through seaports at Mumbai, Kolkata,
Cochin, Magdalla, Kakinada, Kandla Mangalore, Marmagoa, Chennai, Nhava Sheva,
Paradeep, Pipavav, Sikka, Tuticorin, Visakhapatnam, Dahej, Mundhra,
Nagapattinam, Okha, Bedi (including Rozi - Jamnagar), Muldwarka, Porbander,
Dharamatar, Vadimar, Haldia (Halida Dock Complex of Kolkata Port),
Krishnapatnam, Ennore (Tamil Nadu), Karaikal (Union Territory of
Puducherry) and Kattupalli (Tamil Nadu) or through any of the airports
at Ahmedabad, Bangalore, Bhubaneswar, Mumbai, Kolkata, Coimbatore, Delhi,
Hyderabad, Jaipur, Chennai, Srinagar, Trivandrum, Varanasi, Nagpur, Cochin, Rajasansi (Amritsar), Lucknow
(Amausi), Indore,
Dabolim (Goa) and Visakhapatnam or through any of the Inland Container Depots
at Agra, Bangalore, Coimbatore, Delhi, Faridabad, Gauhati, Guntur, Hyderabad,
Jaipur, Jallandhar, Kanpur, Ludhiana, Moradabad, Nagpur, Pimpri (Pune),
Pitampur (Indore), Surat, Tirupur, Varanasi, Nasik, Rudrapur (Nainital), Dighi
(Pune), Vadodara, Daulatabad (Wanjarwadi and Maliwada), Waluj (Aurangabad),
Talegoan (District Pune), Dhannad Rau (District Indore), Kheda (Pithampur,
District Dhar), Patli (Gurgaon), Irugur Village (Tamil Nadu), Thudiyalur (Tamil
Nadu), Chettipalayam(Tamil Nadu) and Veerapandi (Tamil Nadu), Marripalem
Village in Taluk of Edlapadu, District Guntur, Tondiarpet (TNPM), Chennai and Irungattukottai,
SIPCOT Industrial Park, Kattrambakkam Village, Sriperumbudur Taluk, Kanchipuram
District, Tamil Nadu, Anaparthy (Andhra Pradesh), Salem, Malanpur,
Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara,
Pondicherry, Garhi Harsaru, Bhatinda, Dappar (Dera Bassi), Chheharata
(Amritsar), Karur, Miraj, Rewari, Bhusawal, Jamshedpur, Surajpur, Dadri,
Tuticorin, Kundli, Bhadohi, Raipur, Mandideep (District: Raisen), Durgapur
(Export Promotion Industrial Park), Babarpur and Loni (District Ghaziabad) or through the Land Customs Station at
Ranaghat, Singhabad, Raxaul, Jogbani, Nautanva (Sonauli), Petrapole, Mahadipur,
Nepalganj Road, Dawki, Agartala, Sutarkhandi,
Amritsar Rail Cargo, Attari Road, Hilli, Ghojadanga and Changrabandha or Special Economic Zone as specified in the
notification issued section 76A of the Customs Act, 1962 (52 of 1962).
[Amended by 46/17.05.2005; 77/22.08.2005;
97/17.11.2005; 41/05.05.2006; 116/30.11.2007; 65/09.05.2008; 19/24.02.2009;
123/10.11.2009; 93/14.09.2010; 40/19.05.2011; 37/24.05.2012; 40/14.06.2012;
50/10.09.2012; 04/14.02.2013; 20/03.04.2013]
Provided that the Commissioner of Customs may, by
special order or a public notice and subject to such conditions as may be
specified by him, permit import and export through any other sea-port, airport,
inland container depot or through a land customs station. [Inserted by
46/17.05.2005; 63/04.05.2007]
(7)
notwithstanding anything contained in condition (4), where the Licensing
Authority grants extension of block-wise period for any block(s) or overall
period of fulfilment of export obligation upto a period of two years or
regularization of shortfall in export obligation, not exceeding five per cent
of such export obligation, the said block-wise period or overall period of
export obligation shall be extended or condoned by the Deputy Commissioner of
Customs or Assistant Commissioner of Customs, as the case may be :
Provided that in respect of sick unit referred to in
the second proviso to condition (2), extension of overall period of export
obligation shall not be allowed.
Provided further that the Regional Authority may grant
further extension in the overall period of export obligation upto a period of
further two years if the authorisation holder pays fifty per cent differential
duty on the unfulfilled portion of the export obligation and agrees to fulfill
other conditions as may be specified by the Regional Authority for this
purpose.
[Proviso inserted by 43/05.05.2006]
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 case may be, as the goods which were
imported.
Table
|
SNo. |
Description of goods |
|
(1) |
(2) |
|
1. |
Capital goods for pre-production,
production and post production including second hand capital goods. |
|
2. |
Capital goods in SKD/CKD conditions
to be assembled into capital goods by the importer. |
|
3. |
|
|
4. |
Spare parts of goods specified at
Serial Nos. 1and 2 as actually imported and required for maintenance of
capital goods so imported, assembled, or manufactured. |
|
5. |
Spare parts |
4. Waiver of Export Obligation may
be considered where, because of force majeure or other unforeseen circumstances/
reasons, exporter is unable to fulfill export obligation. Such requests shall
be considered by a Committee comprising representative(s) of Department of
Commerce and Department of Revenue under Directorate General of Foreign Trade.
Decision of this Committee shall be notified by Department of Revenue for
implementation. [Inserted by 72/21.05.2007]
5. 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 [Inserted
by 65/09.05.2008]
Explanation –
For the purposes of this notification,-
(1) “Capital goods” has the same meaning as assigned
to it in Paragraph of 9.12 of the Foreign Trade Policy;
(2) “Foreign Trade Policy” means the Foreign Trade
Policy 2004-2009 published vide notification of the Government of India in the
Ministry of Commerce and Industry, No. 1/2004 dated the 31st August, 2004 as
amended from time to time;
(3) “Licensing Authority” means the Director General
of Foreign Trade appointed under section 6 of the Foreign Trade (Development
and Regulation) Act, 1992 (22 of 1992) or an officer authorized by him to grant
a licence under the said Act;
(4) “export obligation”, -
(i) in relation to importers other than those
rendering services, means exports to a place outside India, of products
manufactured with the use of capital goods imported, assembled or manufactured
in terms of this notification:
Provided that export obligation may also be fulfilled
by,-
(a) export of same products capable of being
manufactured with the use of said capital goods; or
(b) export of same products manufactured in different
units of the licence holder; or
(c) through third party exports made by an exporter or
manufacturer on behalf of the licence 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 manufactured product in terms
of paragraph 5.4 of the Foreign Trade 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 licence both
as manufacturer exporter and service provider, the export obligation may be
fulfilled either by export of products specified in sub-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 Company as defined
in paragraph 9.28 of the Foreign Trade policy where licence has been issued to
any one of such Group Company, the export obligation may also be fulfilled by
export of manufactured goods by any other company(s) belonging to such Group
Company:
Provided also that in respect of service
providers in the Port Handling sector, the export obligation may be fulfilled
by earning service charges in Indian rupees which are otherwise considered as
free foreign exchange by the Reserve Bank of India:
Provided also that in respect for hotels the export
obligation may also be fulfilled by Managed Hotels as defined in paragraph 9.36
of the Foreign Trade Policy.
Provided also that payments received against counter
sales in freely convertible foreign exchange through banking channels as per
the Reserve Bank of India guidelines shall be counted for fulfilment of export
obligation in the case of service providers in the retail sector. [Inserted
by 46/17.05.2005; Omitted by 72/21.05.2007]
(iii) shall be, over and above, the average level of
exports achieved by the licencee in the preceding three licencing years for
same and similar products [Inserted by 65/09.05.2008]