[OLD - 5.2

Concessional 3% Duty EPCG Scheme

(a) Import of capital goods for pre-production, production and post production (including CKD/SKD thereof as well as computer software systems) are allowed under this Scheme subject to payment of 3% Basic Customs Duty (BCD). Export obligation (EO) shall be 8 times of duty saved amount (i.e. difference between duty payable and 3% BCD). The Export Obligation Period (EOP) shall be 8 years reckoned from Authorization issue-date.

(b) EO of 6 times of duty saved and EOP of 12 years is applicable to:

(i) agro units, and

(ii) units in cottage or tiny sector.

(c) EO of 6 times of duty saved and EOP of 8 years is applicable to those SSI units whose total investment in plant and machinery does not exceed SSI limit and landed CIF value is upto Rs. 50 lakhs.

(d) In case of EPCG Authorization with a duty saved amount of Rs. 100 crores or more, EOP shall be 12 years.

(e) In case countervaling duty (CVD) is paid in cash on imports under EPCG, incidence of CVD would not be taken for computation of net duty saved, provided the same is not CENVATed.

(f) Capital Goods shall include spares (including refurbished/reconditioned spares), tools, jigs, fixtures, dies and moulds.

(g) Second hand capital goods, without any restriction on age, may also be imported under EPCG scheme.

(h) Import of motor cars, sports utility vehicles/all purpose vehicles shall be allowed only to hotels, travel agents, tour operators or tour transport operators and companies owning/operating golf resorts, subject to the condition that:

(i) Total foreign exchange earning from hotel, travel & tourism and golf tourism sectors in current and preceding three licensing years is Rs. 1.5 crores or more.

(ii) ‘Duty saved’ amount on all EPCG Authorizations issued in a licensing year for import of motor cars, sports utility vehicles/ all purpose vehicles shall not exceed 50% of average foreign exchange earnings from hotel, travel & tourism and golf tourism sectors in preceding three licensing years.

(iii) Vehicles imported shall be so registered that the vehicle is used for tourist purpose only. A copy of the Registration certificate should be submitted to concerned RA as confirmation of import of vehicle. However, parts of motor cars, sports utility vehicles/all purpose vehicles such as chassis etc. cannot be imported under the EPCG Scheme.

(i) Import of Restricted items of imports mentioned under ITC (HS) shall only be allowed under EPCG Scheme after approval from EFC at Headquarters. ]