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Export Promotion Capital Goods (EPCG)

What is the EPCG scheme?

EPCG, the acronym for Export Promotion Capital Goods is a scheme that boosts the competitiveness of India’s export by helping the country import quality capital goods to produce high quality goods and services.

The Export Promotion Capital Goods Scheme (EPCG) initiated by the Government of India is a part of the Foreign Trade Policy 2015-2020. The scheme allows the import of capital goods for pre-production, production, and post-production at 0% customs duty.

Objectives of EPCG Scheme

The objective of the EPCG (Export Promotion Capital Goods) Scheme is to accelerate the import of capital goods for producing high quality goods and services and enhance the country’s manufacturing competitiveness.

Features of EPCG Scheme

  • Manufacturers or Merchant Exporters with supporting manufactures are allowed to import capital goods at 0% customs duty. The authorization holders to enjoy 0% customs duty need to undertake export obligation equivalent to 6 times the amount saved on taxes and duties on capital goods.
  • The imported capital goods cannot be sold or transferred until the export obligation is fulfilled.
  • The installation of capital goods should be done within 6 months from the date of imports.
  • The authorization holders need to file a bond with the customs before the import of capital goods with or without a bank guarantee.
  • The EPCG scheme doesn’t cover second-hand goods
  • Exports filing to meet the export obligation have the privilege to take advantage of schemes under Chapter – 3 & Chapter – 4 also.

Export Obligations under EPCG Scheme

  • To avail of 0% customs duty under the EPCG Scheme, the authorization holder needs to fulfil the export obligation of 6 times of duty saved value in the span of 6 years.
  • Firstly, the authorized holder has to fulfill the export obligation for exporting goods or services on the issue of EPCG authorization.
  • The export obligation has to be more than the average export level achieved by the applicant in the past 3 licensing years for similar kinds of products.

Coverage of EPCG Scheme

  • Manufacturer exporters regardless of the presence of supporting manufacturer(s),
  • Merchant exporters linked with supporting manufacturers and service providers.
  • The scheme also covers service providers who are certified as CSP (Common Service Provider) by the DGFT, State Industrial Infrastructure Corporation or Department of Commerce in subject to provisions and conditions of Foreign Trade Policy 2015-2020.
  • Supporting manufacturers shall be endorsed on the EPCG Authorization before installing capital goods in the factory.

Application Form

  • You can apply for the scheme by selecting the head office or registered office, or manufacturing unit or branch office of an eligible exporter to RA concerned in ANF 5A with the documents mentioned.
  • RA concerned shall issue EPCG authorization on the basis of the nexus certificate submitted by the applicant is Appendix 5A.

No time to register yourself under the EPCG scheme? Look for the best EPCG consultants who can take your job. We, Enrich Services, is the most trusted EPCG consultants that can make your job easier and help you start your business in no time. Get in touch!

Eligibility of Capital Goods Under EPCG Scheme

Let’s have a look at the list of capital goods eligible for 0% customs duty.

Any equipment, accessories, plant, or machinery needed for production or manufacturing or rendering services come under capital goods. Eligible capital goods under the EPCG scheme are:

  • Any machinery, accessories, plant or equipment. This includes packaging equipment, machinery, machine tools, refrigeration equipment, instruments, equipment needed for R&D, testing, pollution control and quality.
  • Dies, tools, spares, fixtures, jigs, moulds and refractories to use in the initial lining.
  • Catalysts for the charge.

Capital Goods that are not eligible for EPCG Scheme are:

Thus the beneficial scheme allows you to enjoy duty free import of capital goods. Looking for the best EPCG Licensing Consulting Services in Hyderabad? We are one of the best EPCG consultants with a team that has decades of experience in the industry. We provide valued and flexible DGFT and industrial subsidy services to make the business easier for you. Talk to us and let us understand your needs before we deliver our smooth services.

What We Do

We at Sai Global Exim Professional Services provide you with a thorough understanding of the terms and conditions pertaining to export requirement under the EPCG scheme. By doing this, you’ll avoid making the same mistakes again. We assist you with the paperwork needed to submit an application for an EPCG licence. The Director General of Foreign Trade is the source of the licence. After the authorization is granted, the clients must adhere to the requirements and compliance guidelines. obtaining a Redemption Letter from DGFT RA and BG release following Customs’ fulfilment of the export requirement.

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Frequently Asked Questions on EPCG

EPCG stands for Export Promotion Capital Goods. The objective of this scheme is to facilitate the import of capital goods with the purpose of producing quality goods and services to enhance India’s export competitiveness. EPCG scheme allows the import of capital goods for pre-production, production, and post-production at zero customs duty.

YManufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service provider(s); and service providers. Refer to FTP and HBP for the latest details.

  • Your user profile must be linked with an IEC.
  • A valid DSC / e-sign must be registered in the system. You may verify the same from My Dashboard > View and Register Digital Signature Token.
  • GSTN details correspond to the branches of the IEC. The same may be added from Services > IEC Profile Management > Modify IEC.
  • Valid RCMC details issued to the IEC.
  • If your IEC is in DEL, you shall be allowed to proceed with the submission of your request for issuance of an EPCG authorization, however, your application shall only be actioned upon once your IEC is removed from DEL.

    Refer to FTP and HBP for the latest details. The export obligation under the Export Promotion Capital Goods Scheme is required to be fulfilled by the export of goods/services rendered by you. There are two types of export obligations that the authorization holder is obligated to complete:

  • Annual average export obligation: The export obligation is over and above, the average level of export achieved by you as an authorisation holder in the preceding three licensing years for the same and similar products within the overall export obligation period including the extended period (if any). Such an average would be the arithmetic mean of export performance in the previous three years for the same and similar products.
  • Specific export obligation: Specific export obligation is calculated as six times the duty saved amount. You must fulfill a minimum of 50% of export obligation in each block of years, i.e., the first block being the first 4 years and the second block is of the remaining 2 years.
  • Capital Goods for the purpose of the EPCG scheme shall include:

  • Capital goods as defined in Chapter 9
  • Computer systems and software which are a part of the capital goods
  • Spares, molds, dies, jigs, fixtures, tools & refractories
  • Catalysts for initial charge plus one subsequent charge
  • Please follow the below steps to check the status of a submitted application for EPCG

  • My Dashboard > Submitted Applications
  • Enter the Type of Scheme (Select in the dropdown: Export Promotion Capital Goods (EPCG)) and Type of Sub Scheme (Issuance of EPCG Authorisation/Post-Export EPCG Authorisation)
  • Click on Search
  • In the search results, please find the status of the submitted application under the column File Status
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