Benefits of foreign trade policy an overview

1. Foreign Trade Policy Foreign Trade Policy

2. Foreign Trade Policy 2009-14 • Framed by DGFT under Ministry of Commerce (MoC)
• Announced once in 5 years
; annual supplements
every year for changes
and on-course corrections.
• FTP and HBP represents broad
policy frame work; lucid narration, leaving
room for interpretations/doubts.
•
Implemented through Notifications of
DoR
through Customs, Excise and
•
Implemented through Notifications of
DoR
through Customs, Excise and
Service Tax authorities, for Union taxes.
• State Govt. frames policy in line with the broad fram e-work of the policy.
• FTP, HBP, PN, Notification issued by DGFT should not
be read in isolation
• Re-validation with DoR Rules/Notifications and State l aw essentia
l in order
to revalidate
the provision and to avoid un-certainty
.

3. Foreign Trade Policy 2009-14
Back-drop: • Policy unveiled at the back-drop unprecedented global slow-downstarted in the year
2008-09.
• India witnessing contraction in demand in traditional export markets,
• 4 Quarters of fall in exports, though domestic market largely unaffected
• Exports goes up fromUS$ 168 Bio(2008) fromUS$ 63 Bio(2003-04) and India’s
share of global trade grew from0.92%in 2003 to1.64%in 2008.
Objective of FTP 2009-14 • Develop/Improve export potential and performance,
•Boost foreign tradeand earnvaluable foreign exchange
•Arrest and reversedeclining trend of exports
• Double India's exports of goods and services by 2014 .
• Double India's share in global merchandise trade by 2020
• Tapping of alternate export markets
• Improvement in infrastructurerelated to exports;
• Bringing down transaction costs
• Providing fullrefund of all indirect taxes and levies

4. Area Covered Promotional Measure
Foreign Trade Policy
EPCG

5. Promotional Measure
(Chapter – 3 of FTP)
1. Export and trading Houses Status 2. Served From India Scheme (SFIS) 3. VisheshKrishiand Gram UdyogYojana ( VKGUY ) 4. Agri. Infrastructure Incentive Scrip 5. Focus Market Scheme (FMS) 6. Incremental Exports Incentivisation Scheme (IEIS) 7. Focus Product Scheme (FPS) 8. Market Linked Focus Products Scheme (MLFPS) 9. Status Holder Incentive Scrip (SHIS)

6. 1.Export and Trading Houses Status
•Eligibility:
Manufacturer exporters, Merchant exporters,
Service providers, Export Oriented Units (EOU),
Special Economic Zones (SEZ), Agri-Export
Zones (AEZ), Electronic Hardware Technology
Parks (EHTP), Software Technology Parks (STP)
and
Bio
-
technology
Parks
(BTP)
shall
be
eligible
and
Bio
-
technology
Parks
(BTP)
shall
be
eligible
for status under FTP
•Status Category
:
– Status category is recognized depending
upon export performance.
– Export performance will be calculated based
on the FOB value of export proceeds realized
during current and previous three years (Total
4 years)
– For export house (EH) status
, export
performance is necessary in at least two out
of four years.

7. S No. Status Category Export FOB/FOR Value in
Rs.
1 Export House (EH)20 Crs
2
Star Export House (SEH)
100 Crs
•Status Category
1.Export and Trading Houses Status
2
Star Export House (SEH)
100 Crs
3 Trading House (TH)500 Crs
4 Star Trading House (STH) 2,500 Crs
5 Premier Trading House (PTH) 7,500 Crs
•Conditions for Grant of Status
:
Transfer of export performance from one to another is not per mitted.
Exports made on re-export basis shall not be counted for reco gnition;
Exports made by subsidiary of a limited company shall be counted towards export
performance of limited company for recognition only if limi ted company has a majority
share holding in subsidiary company;

8. •Advantages:
– Authorization and Customs Clearances for both imports andexports on self-
declaration basis;
– Fixation of Input-Output norms on priority within 60 days;
– Exemption from compulsory negotiation of documents through banks. Remittance /
Receipts, however, would be received through banking channels;
1.Export and Trading Houses Status
– Exemption from furnishing of BG in Schemes under FTP;
–SEHs and aboveshall bepermitted to establish Export Warehouses
, as per
DoR guidelines
– For status holders, a decision on conferring of ACP Status s hall be communicated
by Customs within 30 days from receipt of application with Cu stoms.
– As an option, for Premier Trading House (PTH), theaverage level of exports
under EPCG
Scheme shall be thearithmetic meanof exportperformance in last
5 years, instead of 3 years
.
Cont...

9. •Advantages:
– Status Holders of specified sectors shall be eligible for Status Holder Incentive Scrip
(SHIS).
– Status Holders of Agri. Sector shall be eligible for Agri. I nfrastructure Incentive Scrip
underVishesh Krishi Gram Udyog Yojana (VKGUY).
•
Procedure
:
1.Export and Trading Houses Status
•
Procedure
:
– Application for Status recognition shall be filed in ANF 3A
by 31
st
March of the current
year with Jurisdictional RA / Development commissioner (DC )
– All newly issued Status Certificate shall be valid from 1
st
April of the year during which
application for recognition was filed;
– All Status Certificate shall be valid for 5 years. (Status certificate beyond 31/03/2014
shall continue to remain in force, in case provision of FPT (2009-14) continue to
recognize the status;
– Existing status holders who have applied for renewal befor e expire of their status, shall
have a grace period of 6 months, pending finalization of appl ication for grant.

10. 2. Served From India
Scheme (SFIS)
•Objective
:
To accelerate growth inexport of services
to create a powerful
and unique ‘Served from India’brand.
•Eligibility
:
–Service exporters
who has freeForex earning of Rs.10
lacs and above
in the Financial Year. For individual service
providers
-
Rs
.
5
lacs
providers
-
Rs
.
5
lacs
– Eligible services (wef.Jan’2011) listed in Appendi x-41 of HBP
Vol-1; Appexdix-10 for prior periods.
– Forex earned through international Credit card and through
instruments as permitted by RBI for rendering of services sh all
be considered for computation of Duty Credit Scrip.
•Ineligibility
:
– Forex inflow on account of –
• Debt or equity participation
• Donations
• Repayment of Forex loans

11. 2. Served From India Scheme (SFIS)
– Financial Services:
• Raising of foreign currency loan;
• Realization of export proceeds for clients;
• Issuance of foreign equity through ADRs / GDRs or other simi lar instruments;
• Issuance of Forex bonds
•
Sales of securities and other financial instruments ;
•
Sales of securities and other financial instruments ;
• Any other receivable not connected with the servic e rendered.
– Earned through contract / regular employment abroad;
– Payment for services received from EEFC account;
– Forex turnover by healthcare or educational instit utions, like equity participation,
donations etc.
– Supplies made to or export from SEZ / EOU / EHTP / STPI / BTP etc
– Export of goods;
– Forex earned for services provided in other two co untries, not touching India at all.

12. •Entitlement
:
– Duty credit scrip equivalent to 10% of NET
Free Foreign exchange earned.
•Utilization
:
– Imported/Indigenous procurement of any capital goods including spares, Office
equipments and professional equipments, office furnitureand consumables of
the
Service
sector
business
.
2. Served From India Scheme(SFIS)
the
Service
sector
business
.
– Service provider who arealso engaged in manufacturing activity
,allowed to
use
SFIS scrip for importing / domestic sourcing of ‘Capital Goods’ including
spares formanufacturing
.
– Duty credit scrip in case of hotels, clubs having residenti al facility of minimum 30
rooms, golf resorts and stand-alone restaurants having catering facilities, may
also be used for import of consumables including food items a nd alcohol.
•Transferability
:
– SFIS scrip subject to ‘Actual user condition’ and hence not transferable.
– Transferability within group companyis permitted.

13. •Procedure:
– Application inANF-3B, for SFIS to be filed with Regional Authority (RA) on
monthly, quarterly, half yearly or annualbasis at the option of the applicant.
– Periodicity to be opted with the first application
– Last date for filing application, within12 months
of the respective month,
quarterly,
half
yearly
or
annual
basis
at
the
option
of
the
applicant
.
2. Served From India Scheme(SFIS)
quarterly,
half
yearly
or
annual
basis
at
the
option
of
the
applicant
.
– Applications filed after the expire dateup to two yearswould be considered
subject to ‘late-cut’ranging from 2% to 10% of the scrip value.
– SFIS utilization for Mfg activity – subject to endorsement by RA

14. •Objective:
Tocompensate high transport
cost and offset other dis-
advantage, in order to promote
export of-
–Agricultural produceand their
value
added
products
;
3. Vishesh Krishi and Gram Udyog
Yojana (VKGUY)
value
added
products
;
–Minor forest produceand their
value added variants;
–Gram Udyog products; and
– other Notified products

15. •Entitlement:
– Products listed under Appendix-37A
are eligible for VKGUY@ 5%
of the FOB
value of exports, earned in Forex.
– Some Flowers and Fruits
, listed in table 1 of Annedix-37A, eligible for
additional 2%.
•
Ineligible:
3. Vishesh Krishi and Gram Udyog
Yojana (VKGUY)
•
Ineligible:
– Export of imported goods
– Export originating in other countries and trans-sh ipped through India
– Deemed Exports
– SEZ Exports and SEZ products exported through DTA units
– Items restricted or prohibited for exports

16. •Utilization:
– For payment of duty onimport or indigenous
procurement ofinputs or goods
including capital goods
, except certain goods as listed Appendix-37B of HBP
Vol-1;
– PaymentService tax;
–
Excise
duty
and
service
tax
paid
through
the
scrip,
CENVATable
;
3. Vishesh Krishi and Gram Udyog
Yojana (VKGUY)
–
Excise
duty
and
service
tax
paid
through
the
scrip,
CENVATable
;
– Payment of duty againstimports under EPCG scheme.
•Transferability:
VKGUY duty credit scrip and goods imported would be freely transferable.
•Procedure
:
– Application in formANF-3Calong with prescribed documents to be filed with
concerned RA.
– Application to be filed within 12 months
– Applications filed after the expiry date up to two years would be considered
subject to late cut ranging from 2% to 10% of the scrip value.

17. •Eligibility & Entitlement:
– Status Holders exporting products under Chapter-1 to 24
– Scrip equal to 10% (incl. VKGUY) of FOB value of exports
– Total incentive for all Status Holders – Rs.100 Crore p.a.
–Transferability:
– Non-transferable except for supporting Mfrs. and s tatus
holders in Food parks.
4. Agri-Infrastructure Incentive Scrip
holders in Food parks.
•Imports allowed:
– Cold storage units, pre-cooling and mother storage units
– Pack houses
– Reefer Van/containers
– Other capital items as per Appendix 37F
•Procedure
:
– Zonal office, CLA, New Delhi shall be licensing authority
– Allocation of scrip would be proportionate to the eligible
claims of the individual applicants.

18. 5. Focus Market Scheme (FMS)
•Objective
:
Tooffset high freight costandother externalitiestoselect
international markets
to enhance India’s export
competitiveness in these market.
•Eligibility
:
Export of all products to Countries listed in Table 1, 2 and 3 of Appendix 37C of HBP Vol1
is eligible under the scheme.
•Ineligibility:
– Supplies made to SEZ;
– Service Exports;
– Precious and Semi Precious stones export ex: Diamond, gold, silver etc;
– Ores and concentrates, of all types and in all for ms;
– Cereals and Sugar of all types
– Petroleum products;
– Meat & Meat products and Milk & Milk products;

19. •Ineligibility:
– Re-export of imported goods as defined in para 2.35 of FTP;
– Export through transshipment;
– Deemed export;
– Export made by SEZ units or SEZ products through DTA units;
–
Restricted or prohibited items.
5. Focus Market Scheme (FMS)
–
Restricted or prohibited items.
•Entitlement
:
– Countries covered underTable 1 and 2
of Appendix 37C shall be entitled for
duty Credit scrip equivalent to3% of the FOB value
of export in free foreign
exchange.
– Countries covered underTable 3
of Appendix 37C shall be entitled for Duty
Credit scrip equivalent to4% of the FOB value
of export in free foreign
exchange.

20. •Utilization
:
– For import / indigenous procurement ofinputs or goods including capital
goods,except certain goods as listed Appendix-37B of HBP Vol-1;
– PaymentService tax;
– Excise duty and service paid through the scrip is available asCENVAT credit;
– This scrip can also be utilised for payment of duty against i mports underEPCG
5. Focus Market Scheme (FMS)
scheme.
•Transferability
:
FMS Duty Credit Scrip and items imported against it would be freely transferable
.
•Procedure
:
– Application in formANF 3Calong with prescribed documents to be filed with
concerned RA along withProof of landingand other documents..
– Application to be filed within12 months
– Applications filed after the expire date up to two years would be considered
subject to‘late-cut’ranging from2% to 10%of the scrip value.
– Proof of loading in designated market to be given.

21. 6. Incremental Exports
Incentivisation Scheme (IEIS)
•Objective
:
The objective of this scheme is to incentivize inc remental exports.
•Eligibility
:
– Benefit under this scheme is available on incremental exports :–
• For Jan 2013 to March 2013over Jan 2012 to March 2012; •
For
April 2013 to March 2014
over April 2012 to March 2013;
•
For
April 2013 to March 2014
over April 2012 to March 2013;
– The scheme is region specific and will cover expor t to USA, Europe and Asian
countries,
except Singapore, UAE and Hong Kong.
– 53 Latin American/African Countries added for 2013-14
– This scheme is available for FY 2012-13 & FY 2013-14 only.
•Ineligibility
:
– Export performance cannot be transferred from any other IEC Code;
– Export of imported goods or export made through transshipment;
– Export from SEZ / EOU / EHTP / STPI / BTP / FTWZ;
– Deemed exports, Service exports, Third party export;
– Precious and Semi Precious stones export ex: Diamond, gold, silver etc;

22. 6. Incremental Exports
Incentivisation Scheme (IEIS)
•Ineligibility
:
– Ores and concentrates, of all types and in all for ms;
– Cereals of all types
– Sugar of all types and forms
– Petroleum products;
–
Meat & Meat Products and Milk & Milk Products
–
Meat & Meat Products and Milk & Milk Products
– Supplies to SEZ, Singapore, UAE and Hong Kong.
– If no export in 2011-12 and 2012-13, no benefit in 2013-14
•Entitlement
:
– An IEC holder would be entitled for a duty credit scrip @2% of the incremental
Export
achieved during the period Jan’13 to Mar’13 compared to the same
period of the last year and April’13 o March’14 over same peri od last year.
– Benefit available, over and above other benefits under Cha pter 3 of EPCG.
•Utilization
:
– For import / indigenous procurement of inputs or goods including capital goods
except certain goods as listed Appendix-37B of HBP Vol-1;

23. 6. Incremental Exports
Incentivisation Scheme (IEIS)
•Utilization
:
– Import or indigenous procurement ofinputs, goods including capital goods
– Paymentservice tax;
– Excise duty and service paid through the scrip is available asCENVAT credit;
– This scrip can also be utilised for payment of duty against i mports underEPCG
scheme.
•Transferability
:
IEIS Duty Credit Scrip and items imported against i t would be freely transferable.
•Procedure
:
– Application in formANF-3Falong with prescribed documents to be filed with
concerned RA.
– Application to be filed within 12 months
– Applications filed after the expire date upto two years would be considered
subject to late cut ranging from 2% to 10% of the scrip value.
– Proof of lading in designated market to be given.

24. 7. Focus Product Scheme (FPS) •Objective
:
To promote export ofproducts
which have high export intensity/employment
potential, so as to off-set infrastructure inefficiencies and other costs involved in
marketing of these products.
•Eligibility
:
– Export of products listed in Table 1 of Appendix 37D
of HPB vol-1.
–Sale to SEZ
units also eligible.
•Ineligibility:
– Re-export of imported goods as defined in para 2.35 of FTP;
– Export through transshipment;
– Deemed export;
– Export made by SEZ units or SEZ products through DTA units;
– Restricted or prohibited items.
Cont...

25. 7. Focus Product Scheme (FPS) •Entitlements
:
– Products covered underTable 1 of Appendix 37Dof HBP Vol-1 eligible for Duty
Credit Scrip @2% to 5%of FOB value.
– Certain products / Sectors enumerated inAppendix 37Dare eligible forbonus
benefit of additional 2%.
•
Utilization
:
•
Utilization
:
– For import / indigenous procurement ofinputs or goods including capital
goodsexcept certain goods as listed Appendix-37B of HBP Vol-1;
– This scrip can be also be used for payment service tax;
– Excise duty and service paid through the scrip is available as CENVAT credit;
– This scrip can also be utilised for payment of duty against i mports under EPCG
scheme.

26. 7. Focus Product Scheme (FPS) •Transferability
:
FPS Duty Credit Scrip and items imported against it would be freely transferable
.
•Procedure
:
– Application in formANF-3Calong with prescribed documents to be filed with
concerned RA.
–
Application
to
be
filed
within
12
months
–
Application
to
be
filed
within
12
months
– Applications filed after the expire date upto two years would be considered
subject to late cut ranging from 2% to 10% of the scrip value.

27. 8. Market Linked Focus Products Scheme
(MLFPS)
•Objective
:
To incentivize export of products and sectors
of high export intensity stock
employment potential.
•Eligibility
:
– products listed in Table 2 of Appendix 37Dof HBP vol -1.
(Certain products not covered under FMS and FPS are covered under this scrip.) (Certain products not covered under FMS and FPS are covered under this scrip.)
•Ineligibility:
– Re-export of imported goods as defined in para 2.35 of FTP;
– Export through transshipment;
– Deemed export;
– Export made by SEZ units or SEZ products through DTA units;
– Restricted or prohibited items.
•Entitlements
:
2% of FOB of exportsof specified products to the specified markets.
Cont...

28. 8. Market Linked Focus Products Scheme
(MLFPS)
•Utilization
:
– For import / indigenous procurement ofinputs or goods including capital
goodsexcept certain goods as listed Appendix-37B of HBP Vol-1;
– Payment service tax;
– Excise duty and service paid through the scrip is available asCENVAT credit;
– This scrip can also be utilised for payment of duty against i mports underEPCG
scheme.
•Transferability
:
MLFPS Duty Credit Scrip and items imported against it would be freely transferable.
•Procedure:
– Application in formANF-3Calong with prescribed documents to be filed with
concerned RA along with Proof of landing and other documents.
– Application to be filed within 12 months
– Applications filed after the expire date up to two years would be considered
subject to late cut ranging from 2% to 10% of the scrip value.

29. 9. Status Holder Incentive Scrip (SHIS)
(upto FY 2012-13)
•Objective
:
Promote investment in up-gradation of technology.
•Eligibility
:
– Leather sectors excluding finished leather, Textile
and jute sector;
–
Handicrafts,
Engineering sectors
,
Plastics
, Basic chemicals,
–
Handicrafts,
Engineering sectors
,
Plastics
, Basic chemicals,
– Rubber products, Paints, Varnishes, Glass and glassware, Plywood and allied
products, ceramic & refractory
, Paper & paperboards,
– Books, Publications and printing, animal by-produc ts,
– Graphite products, electronics, sports goods and t oys,
–Engineering products
of iron & steel, pipes and tubes
and ferro-alloys.

30. 9. Status Holder Incentive Scrip (SHIS)
(up to FY 2012-13)
•Ineligibility
:
– Applicants availed ZERO duty EPCG during FY 2010-11, FY 2011-12 and FY
2012-13.
– Export of imported goods;
– Exports through trans-shipment originating from a third country
– Deemed Exports – Exports of SEZ and SEZ products through DTA units
– Items prohibited for exports.

31. 9. Status Holder Incentive Scrip (SHIS)
(up to FY 2012-13)
•Entitlements
:
–1% of FOB value
of exports during FY 2009 -10 to FY 2012-13.
– SHIS is over and above
of all other benefits under chapter 3 of FTP.
•Utilization
:
Forimport and indigenous
procurement of capital goods including spares up to
10
%
of
the
scrip
value
.
10
%
of
the
scrip
value
.
•Transferability
:
– Subject to actual user condition;
– Transferable within status holder under the specified sectors;
– Transferable to group companies.
•Procedure:
– Application in formANF-3Ealong with prescribed documents to be filed with
concerned RA.
– Application to be filed within 12 months .
– Applications filed after the expire date up to two years would be considered
subject to late cut ranging from 2% to 10% of the scrip value.

32. Export Promotion Capital Goods Scheme
(EPCG)

33. Export Promotion Capital Goods
(EPCG)
•Feature
:
– Zero Duty EPCG Scheme allows import of Capital goods (CG) for pre-
production, production and post production at ZERO
customs duty;
– CG includesCKD / SKD imports, software systems, spares, tools, jigs,
fixtures, dies and moulds;
–
Spares,
moulds,
die,
fixtures,
tools,
jigs
and
refractory
for
initial
lining
for
existing
–
Spares,
moulds,
die,
fixtures,
tools,
jigs
and
refractory
for
initial
lining
for
existing
P&M (imported, under EPCG or otherwise) allowed.
– For Status holders who has exports in the last 2 years can ava il of theEPCG for
annual requirement
, subject to ceiling of 50% of the FOB value of exports in the
preceding financial year;
– EPCG is subject toactual userconditions until export obligation is completed;
– Permissible to procure CG from Indigenous source; Supplies to EPCG holder by
an ingenious supplier would be eligible for deemed export benefit;

34. •Feature
:
– EPCG authorization holders can opt fortechnological up-gradation
ofexisting
imported CGsubject to -
• Minimum time period for application –4 years
from earlier EPCG issue date;
• EO up to 50% on the earlier EPCG should be fulfilled;
•
EO
would
be
re
-
fixed
for
the
balance
as
well
as
the
new
CG
over
a
period
Export Promotion Capital Goods
(EPCG)
•
EO
would
be
re
-
fixed
for
the
balance
as
well
as
the
new
CG
over
a
period
of 6 years @ 6 times of the duty saved;
• This benefit can be availed once and theminimum
import should be10%
of
the existing investment in P&M;
• CG imported under this scheme should benew and technological
superiorto the earlier CG as certified by Chartered engineer.
–Project import concessioncan also be simultaneously processed so that duty
payment if any would be the difference between EPCG and project import
concession.

35. •Eligibility
:
–Manufacture exporterswith or withoutsupporting manufacturer(s)/vendor
(s),merchant exporters tied to supporting manufacturer(s) andservice
providers;
– Service providers, those are designated / certified asCommon Service
Provider(CSP) by the DGFT, Department of commerce or State Industrial
Service
recipients
Export Promotion Capital Goods
(EPCG)
Infrastructural Corporation –
Service
recipients
to comply with EO condition;
– Exporters availingSHIS in that year,would not be eligiblefor ZERO Duty
EPCG unless they SHIS benefit has beensurrendered / refunded;
–Second hand CGshall not be permitted under this scheme;
– The exports shall bephysical exports. However ‘deemed exports’, supplies to
SEZ / Developers / Co-developers counted towards EO irrespective of currency
of realization.

36. •Export Obligations
(EO):
– EO shall be fulfilled by export of goods manufactured / serv ice provided by the
applicant;
– EO shall be over and above theAverage (Arithmetical mean) Export achieved
by the applicant in thepreceding three years;
– For indigenously sourced CG, the EO would be reckoned with reference to
Notional
Customs
duty
saved
;
However
EO
will
be
reduced
by
10
%
;
Export Promotion Capital Goods
(EPCG)
Notional
Customs
duty
saved
;
However
EO
will
be
reduced
by
10
%
;
– EO equivalent to6 timesthe duty saved,within 6 yearsfrom the authorization
issue date;
– If CVD paid in cash, the same would not be considered for EO,if CENVAT
benefit not availed
;
–Import
of spares, mould, jigs etc for an imported CG
underEPCG or otherwise
would be allowed subject to ceiling of 10% of existing CG Valu e – EO restricted
to 50% (benefit not applicable for import of spares for indig enous procured CG)
– Spares, moulds jigs etc can be importedwithout 10% restriction, but EO
would be 100%

37. •Export Obligations
(EO):
– Shipments under AAS, DFRC, DFIA, DDB, Incentive Scheme under chapter 3 of
FTP is also becounted for EOunder EPCG;
– EO can be fulfilled by supply ofITA bound productsinto DTA provided
realization in Forex;
– Royalty payment received in Forex for R&D services countedagainst EO;
–
BIFR
companies
allowed
EO
extension
as
per
the
rehabilitation
package
;
Export Promotion Capital Goods
(EPCG)
–
BIFR
companies
allowed
EO
extension
as
per
the
rehabilitation
package
;
– Units located inArunachalam, Assam, Manipur, Meghalaya, Mizoram,
Nagaland, Sikkim, Tripura and J&Kare eligible for lower EO of 25% of the
specific EO;
– For Calculation of Average EO,exports being counted for specific EO in
respect of unredeemed EPCG, would not be considered;
– Exports in fulfillment of Advance authorization Scheme and Duty Free Import
Authorization scheme, would be eligible for EPCG EO fulfill ment;
– Minimum50% of the EO should be completed within first 4years and
remaining in last 2years.

38. •Non-compliance with EO:
– Where EO of the first 4years is not completed, the authoriza tion holder liable to
pay the customsduty on the un-fulfilled EO together with interest, unless
the EO period is extended by the RA. Export Promotion Capital Goods
(EPCG)
•Incentive for fast-track companies:
The EPCG holder fulfilled75% or more of specific EO and 100% of the average
EO in 3 or less years, will be eligible for waiver of the balance obligation.

39. •Procedures
:
– Application for authorization to be made to RA inANF 5Aalong with prescribed
documents;
– Nexus Certification by Independent Chartered Engineer inAppendix - 32A.
– Installation Certificate to be obtained from Jurisdictio nal central excise authority,
within 6 months of imports (for spares installation certifi cate within 3years);
Export Promotion Capital Goods
(EPCG)
– Installation certificate from independent chartered eng ineer, if the importer is not
registered with central excise;
– EPCG Scheme is available for an EOU/SEZ, while converting into to a DTA unit
subject to NOC from Development Commissioner;
– Indigenous sourcing of CG subject to ‘invalidation ’ by RA.;
– Souring of CG from overseas or domestic under lease is permissible;
– Export through third party is allowed
– If merchant exporter is EPCG holder, Name of supporting manufacture should be
indicated in the Authorization

40. •Procedures
:
– The shipping bill should contain EPCG authorizatio n number and date
– A report of fulfillment of EO should be submitted with the RA, by 30
th
of April
every year;
– Automatic enhancement of 10% of CIF value of import allowedwithout
endorsement by RA.
Export Promotion Capital Goods
(EPCG)
–EPCG for annual requirement
: -
• Authorization will be issued with specific duty saved amount and
corresponding EO;
• Applicant to indicate the products proposed to be exportedunder this
authorization;
• Authorization holder required to submit nexus certificat e from a chartered
engineer to the customs authority at the time of clearance of CG with a copy
to RA concerned, along with a copy of BOE.

41. •Post Export EPCG:
– Available to exporters, who intend to import CGon payment of applicable
customs duty in cash
and choose to opt for this;
–Basic customs dutypaid on CG shall be remitted in the form of Freely
transferable duty credit scrip;
–
Specific
EO
under
this
scheme
is
85
%
of
the
applicable
Specific
EO
;
Export Promotion Capital Goods
(EPCG)
–
Specific
EO
under
this
scheme
is
85
%
of
the
applicable
Specific
EO
;
– This scrip can be used for payment of customs duty on import or excise d uty
on indigenous procurement;
– RA shall issue the authorization specifying –
• “Not for imports” on the body on the authorization;
• Average EO if any;
• Specific EO @85% of the applicable Specific EO.

42. •Post Export EPCG:
– The export obligation period shall start form the authorizati on issue
date.
– On completion of exports, exporter to file application for issue of
Freely referable scrip inForm ANF-5Balong with other documents
such
as
duty
paying
Challan,
Nexus
and
Installation
certificate
etc
.
Export Promotion Capital Goods
(EPCG)
such
as
duty
paying
Challan,
Nexus
and
Installation
certificate
etc
.
– RA shall issue the certificate taking into account the basic customs
duty paid
equivalent to proportionate EO fulfilled.

43. Questions..