Custom department vide a notification no. 5/2013 dated 18 February 2013 issued the conditions for the export promotional capital goods EPCG scheme. In this scheme, custom department exempt the custom duty on the behalf of export. Full notification is as under.
Notification No. 05 /
2013-Customs
New Delhi, the 18
th February, 2013
G.S.R. 99 (E).— In exercise of the powers conferred by
sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the
Central Government, being satisfied that it is necessary in the public interest
so to do, hereby exempts goods when imported into India against a Post Export EPCG
duty credit scrip (0% EPCG variant)
issued by the Regional Authority in accordance with paragraph 5.11 under Chapter 5 {Export Promotion Capital
Goods (EPCG) Scheme} of the Foreign Trade Policy which provides for duty
remission in proportion to export obligation fulfilled (hereinafter referred to
as the said scrip) from,-
(a) the whole of the duty of customs leviable thereon under
the First Schedule to the Customs Tariff Act, 1975 (51 of 1975); and
(b) the whole of the additional duty leviable thereon under
section 3 of the said Customs Tariff Act.
2. The exemption under this notification shall be subject to
the following conditions, namely:-
(1) that the said
scrip is granted against a valid authorisation issued on or before 31st March,
2013 under para 5.23 of the Handbook of Procedures Volume 1 (hereinafter
referred to as the said authorisation) by the Regional Authority to an
applicant (hereinafter referred as the authorisation holder) who opted for the scheme
of Post Export EPCG Duty Credit Scrip (0% EPCG variant):Provided that the said
authorisation is not issued to an applicant who is currently availing any
benefits under Technology Upgradation Fund Scheme (TUFS) administered by the
Ministry of Textiles, Government of India. In the case of applicant
who is Common Service Provider (hereinafter
referred to as CSP), this bar shall apply when CSP or any of its specific users
is currently availing any benefits under TUFS. This condition shall not apply
where the benefit under TUFS has been obtained but the
exact line of business in TUFS is different from the line of business
under authorisations issued under para 5.23 of Handbook of Procedures Volume
1 or where benefits availed under TUFS
are refunded, with applicable interest, before
the said authorisation was issued:
Provided further that the applicant is not issued, in the
year of issuance of the said authorisation, the duty credit scrips under Status
Holders Incentive Scrip (SHIS) scheme under para 3.16 of the Foreign Trade
Policy. In the case of applicant who is CSP, the CSP or any of its specific
users should not be issued, in the year
of issuance of the said authorisation,
the duty credit scrips under SHIS. This condition shall not apply where already
availed SHIS benefit that is unutilised is surrendered or where benefits
availed under SHIS that is utilised is refunded, with 2 applicable interest,
before issue of the said authorisation. SHIS scrips which are surrendered or benefit
refunded or not issued in a particular year for the reason the said
authorisation has been issued in that year shall not be issued in future years
also;
(2) that the said authorisation is not for import under duty
exemption but for import of the goods specified in the Table 1 annexed hereto
on full payment of applicable duties in cash;
(3) that the said
authorisation is registered at the port of import specified in the said
authorisation and the goods, which are specified in the Table 1 annexed hereto,
are imported within nine months from the date of issue of the said authorisation on full payment of applicable duties
in cash, and the said authorisation is produced before the
proper officer of customs at the time of clearance of the goods for endorsement of the import particulars and in cases where
the authorisation holder has
opted that the Cenvat Credit under Cenvat Credit Rules, 2004 in
respect of the additional duty under
section 3 of the Customs Tariff Act ,
1975 (51 of 1975) paid (hereinafter referred to as additional duty of
customs) shall not be taken, the proper
officer endorses ―Not valid for Cenvat Credit‖ on the bill of entry:
Provided that the goods specified in the Table 1 annexed hereto
are imported for export of engineering and electronic products, basic chemicals
and pharmaceuticals, apparels and textiles, plastics, handicrafts, chemicals
and allied products, leather and leather products, paper and paperboard and
articles thereof, ceramic products, refractories, glass and glassware, rubber and
articles thereof, plywood and allied products, marine products, sports goods
and toys and are other than those required for export of products covered under
following chapters or headings of the First Schedule to the Customs Tariff Act,
1975 (51 of 1975), namely:-
Chapters 1, 2, 4, 5 (except handicrafts), 6 to 24, 25 to 27,
31, 43, 44 (except plywood and allied products), 45, 47, 68 (except handicrafts),
71, 81 (metals in primary and intermediate forms only), 89, 93, 97 (except
handicrafts), 98; headings 4011 to 4013,7401 to 7406, 7501 to 7504, 7601 to 7603, 7801, 7802, 7901
to 7903, 8001, 8002 and 8401:
Provided further that catalyst for one subsequent charge
shall be allowed, under the authorisation
in which plant, machinery or equipment and catalyst for initial charge have
been imported, except in cases where the
Regional Authority issues a
separate authorisation for catalyst
for one subsequent charge after the plant, machinery or equipment and catalyst
for initial charge have already been imported:
Provided also that the import of the goods specified in the
Table 1 annexed hereto are made upto the 31st December, 2013;
(4) that the goods
imported under the said authorisation are installed and put to use, after their
import, in the authorisation holder‘s factory or premises and at the time of
registration of the said scrip a certificate,confirming such installation and
use of the goods, from the jurisdictional Deputy Commissioner of Central Excise
or Assistant Commissioner of Central Excise, as the case may be, which has been
issued prior to the date of the first application filed by the authorisation
holder for issuance of duty credit scrip against the 3said authorisation, is produced before the Deputy Commissioner of
Customs or the Assistant Commissioner of Customs, as the case may be:
Provided that in the case of manufacturer authorisation holder
and merchant authorization holder having supportingmanufacturer(s) or
vendor(s), the capital goods may be installed at the factory or premises of
such other person whose name and address is endorsed on the said authorisation
and also on the shipping bills for fulfillment of the export obligation and the
authorisation holder and such other person jointly and severally fulfill the
export obligation and all other conditions. This shall not apply to a CSP:
Provided further that if the authorisation holder, including
an authorisation holder who is a CSP, is not registered with the Central Excise
he may produce the said certificate of installation and usage issued by an
independent Chartered Engineer;
(5) that where the
goods imported under the said authorisation are found defective or unfit for
use, they may be re-exported back to the foreign supplier within three years
from the date of payment of duty on the importation thereof subject to the
condition that –
(a) at the time of re-export the goods are identified to the
satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of
Customs, as the case may be, to be the same goods which were imported;
(b) when the re-export of the goods has been made under claim
of duty drawback, no duty remission in the form of duty credit scrip for the
duty paid at the time of import on the reexported goods shall be allowed;
(c) after any duty remission in the form of duty credit
scrip has been claimed in respect of the duty paid on the goods imported under
the said authorisation, no duty drawback shall be allowed when the goods are
re-exported and the export obligation shall also not be refixed;
(6) that goods
imported under the said authorisation are not disposed of or transferred by
sale or lease or any other manner by the
authorisation holder till the date of last export against which the said
scrip is issued;
(7) that the total
export obligation to be fulfilled is equivalent
to eighty five percent. (85%) of six times the amount which is the sum
of applicable duty of customs under the First Schedule to the Customs Tariff Act,
1975 (51 of 1975) paid (hereinafter referred to as basic customs duty),
additional duty of customs, Education Cess under section 94 of the Finance
(No.2) Act, 2004 (23 of 2004) paid and Secondary and Higher Education Cess
under section 136 of the Finance Act, 2007 (22 of 2007) paid on goods imported under
the said authorisation, on Free On Board basis, which is to be fulfilled within
an export obligation period of six years from the date of issue of the said
authorisation:
Provided that
additional duty of customs shall not be taken for computation for the purpose
of fixation of export obligation when
the Cenvat Credit in respect of
additional duty of customs has not been taken:
Provided further that the export obligation shall be 75% of
the export obligation specified above when fulfilled by export of following
green technology products, namely, equipment for solar energy decentralised and
grid connected products, bio-mass gassifier, bio-mass or waste boiler, vapour
absorption chillers, waste heat boiler, waste heat recovery units, unfired heat
recovery steam generators, wind turbine, solar collector and parts thereof,
water treatment plants, wind mill and wind mill turbine or engine, other
generating sets - wind powered,
electrically operated vehicles – motor
cars, electrically operated vehicles –
lorries and trucks, electrically operated vehicles – motor cycle and mopeds,
and solar cells:
Provided also that for units located in Arunachal Pradesh,
Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura, the export
obligation shall be 25% of the export obligation specified above:
Provided also that where a sick unit is notified by the
Board for Industrial and Financial Reconstruction (BIFR) or where a
rehabilitation scheme is announced by the concerned State Government in respect
of sick unit for its revival, the export obligation may be fulfilled within thetime
period allowed by the Regional Authority as per the rehabilitation package
prepared by the operating agency and approved by BIFR or rehabilitation department
of State Government. In cases where the time period is not specified in the
rehabilitation package, the export obligationmay be fulfilled within the time
period allowed by the Regional Authority which shall not exceed twelve years:
Provided also
that the export obligation shall be 50%
of the export obligation specified above to be fulfilled within a period
of six years in the case of spares (including refurbished/reconditioned
spares), moulds, dies, jigs, fixtures, tools and refractory for initial lining,
for the existing plant and machinery (imported earlier, under para 5.23 of Handbook of Procedures
Volume 1 or otherwise), subject to the condition that the CIF value of import
of the above spares, etc is limited to 10% of the CIF value of the plant and
machinery imported under the authorisation (para 5.23 of Handbook of Procedures
Volume 1) or 10% of the book value of the
plant and machinery imported earlier otherwise than under para 5.23 of Handbook of Procedures
Volume 1, as the case may be;
(8) that the duty remission granted as duty credit in
the said scrip bears the same proportion to the amount which is the basic
customs duty on the goods imported under the said authorisation which were considered
for fixation of export obligation, as the extent of export obligation fulfilled
(over and above the average export obligation) bears to the total export
obligation:
Explanation 1. – For the purpose of condition (8),-
(a) the amount of duty remission shall not include the duty
paid, any portion of which has been rebated, including by way of duty drawback;
(b) the amount of duty remission shall not include the duty
paid which are not assessed finally;
(c) extent of export obligation fulfilled shall be the
export obligation fulfilled till the last export included in the said scrip
less the export obligations fulfilled that have been counted towards the previously issued duty credit scrips against
the said authorisation;
(d) in condition (c) above, the export obligation fulfilled
till the last export included in the said scrip shall be taken as the total
export obligation fulfilled in the following cases –
(i) where the authorisation holder fulfills seventy five
percent. (75%) or more of the export obligation as specified in condition (7)
[over and above hundred percent. (100%) of the average export obligation], within
half of the period specified for export obligation as mentioned in said
condition (7), in which case the balance
export obligation shall stand condoned;
(ii) where the
Regional Authority regularises shortfall, in the export obligation as specified in condition (7), not exceeding
five per cent.
(5%) of such export obligation, in which case the said
shortfall shall be condoned;
(e) the Explanation 2
to this notification relating to ‗Export
obligation‘ shall apply severally to
each duty credit scrip, including the said scrip, issued against the said authorisation;
(f) the exports and
supplies made within the export
obligation period specified in condition
(7) shall count towards fulfillment of export obligation;
(g) for fulfillment of export obligation, the payments
against exports/supplies should have
been realised.
(9) that where the
first proviso to condition (7) is applied, the Cenvat Credit in respect of
additional duty of customs shall not been taken and at the time of registration of the said scrip
a certificate, from the jurisdictional Deputy Commissioner of Central Excise or
Assistant Commissioner of Central Excise, as the case may be, to the effect
that Cenvat Credit in respect of additional duty of customs on goods imported under the said
authorisation has not been taken,
is produced by the authorisation
holder before the Deputy Commissioner of Customs or the Assistant Commissioner
of Customs, as the case may be:
Provided that when the authorisation holder is not registered
with Central Excise, he may produce the said certificate on self-certification
basis;
(10) that the duty
remission in the said scrip does not relate to duties paid on the imports made
under the said authorisation which have not been installed and put to use;
(11) that the duty
remission in the said scrip has not been obtained as a consequence of indigenous sourcing of capital goods;
(12) that the said
scrip is issued, on request of the authorisation holder in form ANF5B for duty
remission, by the Regional Authority specifying the same port of registration
as mentioned in the said authorisationand it indicates details of the said
authorisation, total export obligation fixed and its calculation, details of previous
duty credit scrips issued against the said authorisation and the calculation of
duty credit;
(13) that the imports
under the said authorisation, the
exports for fulfilling the export obligations and import of goods against the
said scrip are undertaken through the seaports, airports or through the Inland Container
Depots or through the Land Customs Stations as mentioned in the Table 2 annexed
hereto or a Special Economic Zone notified under section 4 of the Special
Economic Zones Act, 2005 (28 of 2005):
Provided that the Commissioner of Customs may, by special
order or a public notice and subject to such conditions as may be specified by
him, permit import and export through any other seaport, airport, inland
container depot or through a land customs station within his jurisdiction;
(14) that for the purposes of registration, the said scrip is produced by the authorisation holder at the specified port of
registration before the Deputy Commissioner of Customs or the Assistant
Commissioner of Customs, as the case may be, along with
(a) the said authorisation and the bill(s) of entry under
which the imports under the said authorization were made on payment of
applicable duties in cash;
(b) evidence showing the extent of export obligation fulfilled
within the export obligation period;
(c) certificate confirming installation and use as
prescribed in condition (4) above;
(d) certificate that
Cenvat Credit has not been taken as prescribed in condition (9) above, where applicable;
(e) undertaking from the authorisation holder to the effect
that,-
(i) the goods
imported under the said authorisation have not been disposed of or transferred
by sale or lease or any other manner till the date of last export against which
the said scrip is issued;
(ii) the duty
remission in the said scrip does not include the duty paid, any portion of
which has been rebated, including by way of duty drawback; and
(15) that the said
scrip and goods imported against it shall be freely transferable;
(16) that the said
scrip is produced before the proper officer of customs at the time of clearance
for debit of the duties leviable on the goods and the proper officer taking into account the debits already made under
this exemption debits the duties leviable on the goods, but for this exemption;
(17) that the
validity of the said scrip shall be eighteen months from the date of issue and
the said scrip shall be valid on the date on which actual debit of duty is
made;
(18) that where the importer, under this notification, does
not claim exemption from the additional duty of customs leviable under section
3 of the Customs Tariff Act, 1975 (51 of 1975) he shall be deemed not to have
availed the benefit under this notification for the purpose of calculation of
the said additional duty of customs;
(19) that the benefit
under this notification shall not be available to the items listed in Appendix
37B of the Handbook of Procedures Volume 1;
(20) that the
importer shall be entitled to avail of the drawback or Cenvat credit of
additional duty leviable under section 3 of the said Customs Tariff Act against
the amount debited in the said scrip.
Explanation 2. – For the purpose of this notification, -
(A) ―Capital goods‖
has the same meaning as assigned to it in Paragraph of 9.12 of the Foreign Trade
Policy;
(B) ―Common Service
Provider‖ (CSP) means a service provider who is designated or certified as a Common
Service Provider by the DGFT, Department of Commerce or State Industrial
Infrastructural Corporation in a Town of Export Excellence;
(C) ―Export obligation‖,-
(I) means obligation on the authorisation holder to export
to a place outside India, goods manufactured or capable of being manufactured
or services rendered by the use of goods imported under the said authorisation
and the export obligation shall be over and above the average level of exports
achieved by the authorisation holder in the preceding three licensing years for
the same and similar products within the export obligation period and such
average shall be the arithmetic mean of export performance in the last three
years for the same and similar products:
Provided that up to fifty percent. (50%) of the export obligation
may also be fulfilled by export of other good(s) manufactured or service(s)
provided by the authorisation holder or
his group company or managed hotel, which has the said authorisation under which imports were made subject to the condition that in such cases,
additional export obligation imposed shall be over and above the average
exports achieved by the authorisation holder or his group company or managed
hotel in preceding three years for both the original and the substitute
product(s) / service(s):
Provided further that in case of export of goods relating to
handicraft, handlooms, cottage, tiny sector, agriculture, animal husbandry,
floriculture, horticulture, pisciculture, viticulture, poultry, sericulture,
carpet, coir and jute, the authorisation
holder shall not be required to maintain the average level of exports:
Provided also that in case of export of goods relating to
aquaculture (including fisheries), the authorisation holder shall not be
required to maintain the average level of exports subject to the condition that
said authorisation has been obtained for
goods other than fishing trawlers, boats, ships and other similar items:
Provided also that the goods, excepting tools, imported under
said authorisation by the aforesaid
sectors, shall not be allowed to be transferred for a period of five years from
the date of imports even in cases where export obligation has been fulfilled.
Transfer of capital goods would, however, be permitted within the group
companies, after fulfillment of export obligation but before five years from
the date of imports, under intimation to Regional Authority and jurisdictional Central
Excise Authority:
Provided also that exports made to such countries as notified
by Director General of Foreign Trade, shall not be counted for fixing the
average level of exports:
Provided also that in the case of authorisation issued to a
CSP, -
(a) the reference to ‗authorisation holder‘ in this Explanation
shall be taken to mean a reference to ‗CSP and specific users whose details are
informed prior to export by CSP to the Regional Authority‘;
(b) for the exports by users of the common service to be
counted towards fulfilment of export obligation of CSP, the respective shipping bills of the
users of common service shall contain the
authorisation details of the CSP
and the concerned Regional Authority
shall be informed about the details of the users prior to such export;
and
(c) the exports counted against the authorisation shall not be
counted towards fulfillment of other specific export obligations against all other
authorisations issued under Chapter 5 of the Foreign Trade Policy, including
para 5.23 of Handbook of Procedures Volume 1;
(II) shall be fulfilled through physical exports and the
export proceeds realised in freely convertible currency. However the following categories
of supplies, shall also be counted towards fulfillment of export obligation:
(a) deemed exports, namely:
(i) supply of goods against Advance Authorisation/Advance Authorisation for Annual Requirement/ Duty
Free Import Authorisation (DFIA);
(ii) supply of goods to Export Oriented Units (EOUs) or Software
Technology Parks (STPs) or Electronics Hardware Technology Parks (EHTPs) or
Bio-Technology Parks (BTPs);
(iii) supply of goods to projects financed by multilateral
or bilateral agencies or Funds as notified by the Department of Economic
Affairs (DEA), the Ministry of Finance (MOF) under International Competitive
Bidding (ICB) in accordance with procedures of those agencies or Funds, where
legal agreements provide for tender evaluation without including customs duty;
supply and installation of goods and equipments (single responsibility of
turnkey contracts) to projects financed by multilateral or bilateral agencies
or Funds as notified by DEA, MOF under ICB, in accordance with procedures of those
agencies/Funds, where bids may have been invited and evaluated on the basis of
Delivery Duty Paid (DDP) prices for goods manufactured abroad;
(iv) supply of goods to any project or purpose in respect of
which the Ministry of Finance, by a notification, permits import of such goods
at zero customs duty and the supply is made under ICB procedure;
(v) supply of goods to mega power projects as provided in sub-clause
(ii) of clause (f) of para 8.2 of Foreign Trade Policy;
(vi) supply of goods to nuclear power projects through competitive
bidding as provided in clause (j) of para 8.2 of Foreign Trade Policy;
(b) supply of ITA-1
items to Domestic Tariff Area, provided realization is in free foreign exchange;
(c) royalty payments received in freely convertible currency
and foreign exchange received for Research and Development (R&D) services;
and
(d) payments received
in rupee terms for port handling services in terms of chapter 9
of the Foreign Trade Policy
(D) ―Foreign Trade Policy‖ means the Foreign Trade Policy
2009-2014 published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (ii) vide notification of the Government of India in the Ministry
of Commerce and Industry, No.1 (RE – 2012) /2009-2014 dated the 5thJune 2012,
as amended from time to time;
(E) ―Handbook of
Procedures Volume 1‖ means the Handbook of Procedures Volume 1, 2009-14, published
in the Gazette of India, Extraordinary, Part I, Section 1 vide public notice of
the Government of India in the Ministry of Commerce and Industry, Department of
Commerce, No.01 (RE - 2012)/2009-2014, dated the 5thJune, 2012, as amended from
time to time;
(F) ―Manufacture‖ has the same meaning as defined in clause
(f) of section 2 of the Central Excise Act, 1944 (1 of 1944);
(G) ―Regional Authority‖ means the Director General of
Foreign Trade appointed under section 6 of the Foreign Trade (Development and
Regulation) Act, 1992 (22 of 1992) or an officer authorised by him to grant an
authorisation including a duty credit scrip under the said Act;
(H) ―Town of Export Excellence‖ (TEE) means a selected town
producing goods of Rs. 750 Crore or more based on potential of growth in
exports. However, for TEE in handloom, handicraft, agriculture and fisheries
sector the threshold limit would be Rs.150 Crore.
1. Capital goods for pre-production, production and
post-production including second hand capital goods.
2. Capital goods in Semi Knocked Down (SKD)/Completely Knocked
Down (CKD) conditions to be assembled into capital goods by the authorisation
holder.
3. Spare parts of CIF value upto 10% of the CIF value of
goods specified at Serial Nos.1 and 2 as actually imported and required for
maintenance of capital goods so imported, assembled, or manufactured.
4. Spare parts of CIF value upto 10% of the book value of
the existing plant and machinery of the authorisation holder.
1. Seaports Bedi (including Rozi-Jamnagar), Chennai, Cochin,
Dahej, Dharamtar, Haldia (Haldia Dock complex of Kolkata port) Kakinada, Kandla,
Kolkata,Krishnapatnam, Ennore (Tamilnadu) and Karaikal (Union
territory of Puducherry),Magdalla, Mangalore, Marmagoa, Muldwarka, Mumbai, Mundhra,
Nagapattinam,Nhava Sheva, Okha, Paradeep, Pipavav, Porbander, Sikka,
Tuticorin,Visakhapatnam and Vadinar
2. Airports Ahmedabad, Bangalore, Bhubaneswar, Chennai,
Cochin, Coimbatore, Dabolim(Goa), Delhi, Hyderabad, Indore, Jaipur, Kolkata, Lucknow
(Amausi), Mumbai,Nagpur, Rajasansi (Amritsar), Srinagar, Trivandrum, Varanasi andVisakhapatnam.
3. Inland Container Depots-Agra, Ahmedabad, Anaparthy
(Andhra Pradesh), Babarpur, Bangalore,
Bhadohi,Bhatinda, Bhilwara, Bhiwadi, Bhusawal, Chettipalayam
(Tamilnadu), Chheharata(Amritsar), Coimbatore, Dadri, Dappar (Dera Bassi),
Daulatabad (Wanjarwadi andMaliwada), Delhi, Dhannad Rau (District Indore), Dighi
(Pune), Durgapur (Export Promotion Industrial Park), Faridabad, Garhi Harsaru,
Gauhati, Guntur,Hyderabad, Irugur
Village (Tamilnadu), Irungattukottai
(SIPCOT Industrial Park,
Kattrambakkam Village, Sriperumbudur Taluk, Kanchipuram
District, Tamilnadu),Jaipur, Jallandhar, Jamshedpur, Jodhpur, Kanpur, Karur, Kheda (Pithampur,District Dhar), Kota,
Kundli, Loni (District Ghaziabad), Ludhiana, Madurai,Malanpur, Mandideep (District Raisen), Marripalem Village
(in Edlapadu Taluk ofDistrict Guntur), Miraj, Moradabad, Nagpur, Nasik, Patli (Gurgaon),
Pimpri (Pune),Pitampur (Indore), Pondicherry, Raipur, Rewari, Rudrapur
(Nainital), Salem,Singanalur, Surat, Surajpur,
Talegaon (District Pune), Thudiyalur (Tamilnadu),Tirupur, Tondiarpet (TNPM) in Chennai, Tuticorin, Udaipur,
Vadodara, Varanasi,Veerapandi (Tamilnadu) and Waluj (Aurangabad).
4. Land Customs Stations
Agartala, Amritsar Rail Cargo, Attari Road, Changrabandha,
Dawki, Ghojadanga,Hilli, Jogbani, Mahadipur, Nepalganj Road, Nautanva
(Sonauli), Petrapole,Ranaghat, Raxaul, Singhabad and Sutarkhandi.
