5.01

EPCG Scheme

(a) EPCG Scheme allows import of capital goods for pre-production, production and post-production at Zero customs duty. Capital goods imported under EPCG scheme for physical exports are also exempt from whole of the Integrated Tax and Compensation Cess leviable thereon under the subsection(7) and subsection (9) respectively, of section 3 of the Customs Tariff Act, 1975( 51 of 1975), as may be provided in the notification issued under Department of Revenue. Alternatively, the Authorisation holder may also procure Capital Goods from indigenous sources in accordance with provisions of paragraph 5.07 of FTP. Capital goods for the purpose of the EPCG scheme shall include:

i. Capital Goods as defined in Chapter 9 including in CKD/SKD condition thereof;

ii. Computer software systems;

iii. Spares, moulds, dies, jigs, fixtures, tools & refractories for initial lining and spare refractories; and

iv. Catalysts for initial charge plus one subsequent Charge."

(Above para 5.01(a) has been amended vide NOTIFICATION NO. 33/2017, DT. 13/10/2017)

[OLD- (a) EPCG Scheme allows import of capital goods for pre- production, production and post-production at Zero customs duty. Alternatively, the Authorisation holder may also procure Capital Goods from indigenous sources in accordance with provisions of paragraph 5.07 of FTP. Capital goods for the purpose of the EPCG scheme shall include:

(i) Capital Goods as defined in Chapter 9 including in CKD/SKD condition thereof;

(ii) Computer software systems;

(iii) Spares, moulds, dies, jigs, fixtures, tools & refractories for initial lining and spare refractories; and

(iv) catalysts for initial charge plus one subsequent charge.]

(b) Import of capital goods for Project Imports notified by Central Board of Excise and Customs is also permitted under EPCG Scheme.

(c) Import under EPCG Scheme shall be subject to an export obligation equivalent to 6 times of duties, taxes and cess saved on capital goods, to be fulfilled in 6 years reckoned from date of issue of Authorisation.

(Above para 5.01(c) has been amended vide NOTIFICATION NO. 33/2017, DT. 13/10/2017)

[OLD- (c) Import under EPCG Scheme shall be subject to an export obligation equivalent to 6 times of duty saved on capital goods, to be fulfilled in 6 years reckoned from date of issue of Authorisation.]

(d) Authorisation shall be valid for import for 18 months from the date of issue of Authorisation. Revalidation of EPCG Authorisation shall not be permitted.

DELETED - (e) In case countervailing duty (CVD) is paid in cash on imports under EPCG, incidence of CVD would not be taken for computation of net duty saved, provided CENVAT is not availed.

(Above para 5.01(e) has been deleted vide NOTIFICATION NO. 33/2017, DT. 13/10/2017)

(f) Second hand capital goods shall not be permitted to be imported under EPCG Scheme.

(g) Authorization under EPCG Scheme shall not be issued for import of any Capital Goods for generation/transmission of power (including Captive plants and Power Generator Sets of any kind) for:

(Above (g) has been amended vide NOTIFICATION NO. 35/2015, DT. 29/01/2016)

[OLD- (g) Authorisation under EPCG Scheme shall not be issued for import of any Capital Goods (including Captive plants and Power Generator Sets of any kind) for ]

(i) Export of electrical energy (power)

(ii) Supply of electrical energy (power) under deemed exports

(iii) Supply of power (energy) in their own unit, and

(Above (iii) has been amended vide NOTIFICATION NO. 35/2015, DT. 29/01/2016)

[OLD- (iii) Use of power (energy) in their own unit, and ]

(iv) Supply/export of electricity transmission services

(h) Import of items which are restricted for import shall be permitted under EPCG Scheme only after approval from Exim Facilitation Committee (EFC) at DGFT Headquarters.

(i) If the goods proposed to be exported under EPCG authorisation are restricted for export, the EPCG authorisation shall be issued only after approval for issuance of export authorisation from Exim Facilitation Committee at DGFT Headquarters.