PARA 5.7.7

Condition for fulfilment of export obligation

The Export Obligation shall be fulfilled by the export of product(s)/ services originally specified in the EPCG licence which are capable of being manufactured/ produced by the use of the capital goods imported under the licence. In case, the licencee is unable to fulfill the export obligation by the products/ services mentioned above, he shall apply to the concerned licensing authority any time during the validity period (including the extended period) of export obligation giving reasons (supported by documentary evidence, if any,) for their inability to fulfill the export obligation by the products/ services originally specified in the licence along with the details of the alternate product(s) manufactured/services provided by the same firm /company or group company and intended to be exported along with documents evidencing manufacturing of such product/ service being provided by the same firm/ company or group company. He shall also furnish the details of average exports of the past three years for the alternate products/ services intended to be exported duly certified by Chartered Accountant. The licensing authority shall thereafter re-fix the average export obligation by taking into account the average exports of alternate products/ services made during the preceding three licensing years with reference to the year in which such re-fixation has been done and shall also endorse the licence for Product(s)/ services(s) to fulfill the balance export obligation. The re-fixed average export obligation shall be applicable from the financial year during which it has been done.

Notwithstanding the above, the original average Export obligation shall not be required for the remaining period provided the licencee does not want to export the original products/services in the remaining export obligation period.

The licencee can also opt for the re-fixation of the balance export obligation based on 8 times of the duty saved amount for the CIF value in proportion to the balance Export obligation under the scheme.

The aforesaid facilities shall be available for exports made on or after the date of application received for endorsement of alternate items and/ or the re-fixed export obligation subject to endorsement made on the licence subsequently irrespective of the date of issuance of licence, provided the export obligation period including extended export obligation period is valid.

(Above Para 5.7.7 has been added vide PN. No. 42/2003, DT. 28/01/2004)