The following conditions shall apply to the fulfillment of the export
obligation:
(i) The export obligation shall be fulfilled by the export of goods
manufactured or produced by the use of the capital goods imported under the scheme. The export obligation may also be fulfilled by the export of same goods, for which EPCG licence has been obtained, manufactured or produced in different manufacturing
units of the licence holder/ specified supporting manufacturer(s)/vendor(s).
However, if exporter is processing further to add value on the goods so manufactured, the export obligation shall stand enhanced by 50%.
(ii) The exports shall be direct exports in the name of the EPCG
licence holder. However, the export through third party(s) is
also allowed provided the name of the EPCG Licence holder is also
indicated on the shipping bill. If a merchant exporter is the importer, the name of the
supporting manufacturer shall also be indicated on the shipping bills. At the time of
export, the EPCG licence No. and date shall be endorsed on the shipping bills which are
proposed to be presented towards discharge of export
obligation.
(iii) Export proceeds shall be realised in freely convertible
currency.
(iv) Exports shall be physical exports. However, deemed exports as
specified in paragraph 10.2 (a), (b), (d), (f), and (g) of Policy
shall also be counted towards fulfillment of export obligation,
but the EPCG licence holder shall not be entitled to claim any
benefit under paragraph 10.3 of this Policy in respect of such
deemed exports
(v) The export obligation shall, in addition to any other export
obligation undertaken by the importer, except the export
obligation for the same product under the Duty Exemption/
Remission Scheme, be as specified in paragraph (vi) below. The
export obligation shall be, over and above, the average level of exports achieved by him
in the preceding three licensing years for same and similar products. Wherever the average level of export was fixed taking into account the exports made to such
countries as are notified by the DGFT from time to time for this
purpose, the average level of exports shall be reduced by
excluding exports made to these countries. This waiver shall be
applicable to all EPCG licences which have not been redeemed/
regularised.
However, exports made against any EPCG licence,
except the EPCG licences , which have been redeemed, shall not be
added up for calculating the average export performance
for the purpose of the subsequent EPCG licence. If the exporter
achieves an export of 75% of the annual value of the production
of the relevant export product, the export obligation against the
EPCG licence shall be subsumed under that export, provided the
aggregate value of such exports during the specified period shall
not be less than the aggregate value of the export obligation
fixed under paragraph 6.2 of this Policy.
(vi) Where the manufacturer exporter has obtained licences for the
manufacture of the same export product both under EPCG and the
Duty Exemption/ Remission Scheme or Diamond Imprest Licence/
Replenishment Licence (under chapter-8), the physical exports
made under the Duty Exemption Scheme including the DEPB/ DFRC/
Diamond Imprest Licence/ Replenishment Licence shall also be
counted towards the discharge of the export obligation under this
scheme.
(vii) In case of export of computer software, agriculture, aquaculture,
animal husbandry, floriculture, horticulture, pisciculture,
viticulture, poultry and sericulture, the export obligation shall
be determined in accordance with paragraph 6.2 of the Policy, but the licence holder shall not be required to maintain the average level of exports as specified in sub- paragraph (v) above