Zero Duty Export Promotion Capital Goods (EPCG) Scheme









Variants under EPCG Scheme:-

 

ZerForeign Trade Policy has two variants under this scheme, namely, Zero Duty EPCG for few sectors and 3% Duty EPCG for all sectors. During the last announcement on 5th June, 2012, a new Post Export EPCG Scheme was also announced which was notified on 18 February, 2013 by the CBEC  Based on the request of all stakeholders, Government has decided to harmonize Zero Duty EPCG and 3% EPCG Scheme into one scheme which will be a Zero Duty EPCG Scheme covering all sectors.

  

Salient features of the Zero Duty EPCG Scheme:-

 

(i) Authorization holders will have export obligation of 6 times the duty saved amount. The export obligation has to be completed in a period of 6 years.

 

(ii) The period for import under the Scheme would be 18 months.

 

(iii) Export obligation discharge by export of alternate products as well as accounting of exports of group companies will not be allowed.

 

(iv) The exporters who have availed benefits under Technology Upgradation Fund Scheme (TUFS) administered by Ministry of Textiles, can also avail the benefit of Zero duty EPCG Scheme.

 

(v) The  import  of  motor  cars,  SUVs, all  purpose  vehicles  for  hotels,travel    agents,    or    tour    transport    operators    and    companies owning/operating golf resorts will not be allowed under the new Zero Duty EPCG Scheme.

          

Reduced EO for Domestic Sourcing of Capital Goods:-

 

The quantum of specific Export Obligation (EO) in the case of domestic sourcing of capital goods under EPCG authorizations has been reduced by 10%. This would promote domestic manufacturing of capital goods.

 

Jammu kashmir

Reduced EO for units in the State of Jammu & Kashmir:-

              To encourage manufacturing activity in the State of Jammu & Kashmir, the specific export obligation (EO) is reduced to 25%  of  the normal export    obligation. Earlier, this benefit was announced on 5th June, 2012 in respect of units located in North Eastern Region and Sikkim. This provision is now being extended to J&K.