Export obligation

5.4

Following conditions shall apply to the fulfillment of the export obligation:-

(i) Export obligation shall be fulfilled by export of goods manufactured / services rendered by the applicant.

Export obligation under the scheme shall be, over and above, the average level of exports achieved by him in the preceding three licensing years for the same and similar products within the overall export obligation period including extended period, if any; except for categories mentioned in paragraph 5.7.6 of Handbook of Procedures, Vol. 1. Such average would be the arithmetic mean of export performance in last three years for the same and similar products.

Export obligation may also be fulfilled by exports of other good(s) manufactured or service(s) provided by the same firm / company or group company / managed hotel which has the EPCG authorisation.

However, in such cases, additional export obligation imposed shall be over and above average exports achieved by the unit / company / group company /managed hotel in preceding three years for both the original and the substitute product(s)/ service(s) despite exemption in Para 5.7.6 of HBP v1.

(Above clause (i) has been replaced by NTF. NO. 36/2007, DT. 08/10/2007)

[OLD-
(i) Export obligation shall be fulfilled by export of goods, manufactured / services rendered by the applicant.

Export obligation shall be, over and above, the average level of exports achieved by applicant in preceding three licensing years. Such average would be the arithmetic mean of export performance in last 3 years.

Export obligation may also be fulfilled by exports of group company / managed hotel which has EPCG Authorisation. However, in such cases, additional export obligation imposed shall be over and above average exports achieved by unit / company / group company / managed hotel in preceding three years, despite exemption in Para 5.7.6 of HBP v1. For this purpose, average would be based on previous export of goods and services put together.]

(ii) Shipments under Advance Authorisation, DFRC, DFIA, DEPB or Drawback scheme would also count for fulfillment of EPCG export obligation.

(iii) Export obligation can also be fulfilled by supply of ITA- 1 items to DTA provided realization is in free foreign exchange.

(iv) Exports shall be physical exports. However, deemed exports as specified in paragraph 8.2 (a), (b), (d), (f), (g) & (j) of FTP shall also be counted towards fulfillment of export obligation alongwith usual benefits available under paragraph 8.3 of FTP.

Royalty payments received in freely convertible currency and foreign exchange received for R&D services shall also be counted for discharge under EPCG.

Payment received in rupee terms for port handling services, in terms of Chapter 9 of FTP shall also be counted for export obligation discharge.

(v) Foreign exchange counted towards fulfillment of export obligation (over and above the average) shall not be eligible for incentives / rewards under promotional measures / schemes.