Customs Notification on 2015-2020 EPCG Zero
Duty Scheme
[Ref: Notification No. 16/ 2015 –
Customs dated 1 April 2015]
G.S.R. 252 (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 specified in the Table 1 annexed hereto, from,-
(i)
the whole of the duty of customs leviable thereon
under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter
referred to as the said Customs Tariff Act), and
(ii) the whole of the additional duty leviable thereon
under section 3 of the said Customs Tariff Act, when specifically claimed by the
importer.
2. The exemption under this notification shall be
subject to the following conditions, namely:-
(1) that the goods imported
are covered by a valid authorisation issued under the
Export Promotion Capital Goods (EPCG) Scheme
in terms of Chapter 5 of the Foreign Trade Policy permitting import of goods at zero customs duty;
(2) that the 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
validity of the said authorisation and the said
authorisation is produced for debit by the proper officer
of customs at the time of clearance:
Provided that
the goods imported should not fall under clause (f) of paragraph 5.01 of Foreign
Trade Policy:
Provided further
that the 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;
(3) that the importer is not
issued, in the year of issuance of zero duty EPCG authorisation,
the duty credit scrips under the erstwhile Status Holder
Incentive Scrip (SHIS) scheme. In the case of applicant who is Common Service Provider
(herein after referred as CSP), the CSP or any of its specific users should not
be issued, in the year of issuance of the zero duty EPCG 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 applicable
interest, before issue of the zero duty EPCG authorisation. SHIS scrips which
are surrendered or benefit refunded or not issued in a particular year for the reason
the authorisation has been issued in that year shall not
be issued in future years also;
(4) that the goods imported
shall not be disposed of or transferred by sale or lease or any other manner till
export obligation is complete;
(5) that the importer executes a bond in such form and
for such sum and with such surety or security as may be specified by the Deputy
Commissioner of Customs or Assistant Commissioner of Customs binding himself to
comply with all the conditions of this notification as well as to fulfill export
obligation on Free on Board (FOB) basis equivalent to six times the duty saved on
the goods imported as may be specified on the authorisation,
or for such higher sum as may be fixed or endorsed by the Regional
Authority in terms of Para 5.16 of
the Handbook of Procedures, within a period
of six years from the date of issue of Authorisation,
in the following proportions, namely :-
|
S. No. |
Period from
the date of issue of Authorisation |
Proportion
of total export obligation |
|
(1) |
(2) |
(3) |
|
1. |
Block of
1st to 4th year |
Minimum 50% |
|
2. |
Block of
5th and 6th year |
Balance
|
Provided that in case the authorisation is issued to a
CSP, the CSP shall execute the bond with bank guarantee and the bank guarantee shall
be equivalent to 100% of the duty foregone, and the bank guarantee shall be given
by CSP or by anyone of the users or a combination thereof, at the option of the
CSP:
Provided further that the export obligation shall be 75%
of the normal 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, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura,
the export obligation shall be 25% of the normal export obligation specified above:
Provided also
that where a sick unit holding EPCG authorisation 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 holding EPCG authorisation for
its revival, the export obligation may be fulfilled within time 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 obligation may be fulfilled within the period specified in paragraph 5.05
of the Foreign Trade Policy;
(6) that if the importer does not claim exemption from
the additional duty leviable under section 3 of the Customs
Tariff Act, 1975, the additional duty so paid by him shall not be taken for computation
of the net duty saved for the purpose of fixation of export obligation provided
the Cenvat credit of additional duty paid has not been
taken;
(7) that the importer, including a CSP, produces within 30 days from
the expiry of each block from the date of issue of authorisation
or within such extended period as the Deputy Commissioner of Customs or Assistant
Commissioner of Customs may allow, evidence to the satisfaction of the Deputy Commissioner
of Customs or Assistant Commissioner of Customs showing the extent of export obligation
fulfilled, and where the export obligation of any particular block is not fulfilled
in terms of the condition (5), the importer shall within three months from the expiry
of the said block pay duties of customs equal to an amount which bears the same
proportion to the duties leviable on the goods, but for
the exemption contained herein, which the unfulfilled portion of the export obligation
bears to the total export obligation, together with interest at the rate of fifteen
per cent. per annum from the date of clearance of the goods;
(8) that
where the importer fulfills 75%
or more of the export obligation as specified in condition (5) [over and above 100%
of the average export obligation] within half of the period specified for export
obligation as mentioned in condition (5), his balance export obligation shall be
condoned and he shall be treated to have fulfilled the entire export obligation;
(9) that the capital goods imported, assembled or
manufactured, are installed and put to use, after their import, in the importer’s factory or premises and a certificate from the jurisdictional Deputy Commissioner
of Central Excise or Assistant Commissioner of Central Excise or from an independent
Chartered Engineer, is produced within a period of six months from the date of completion
of imports before the Deputy Commissioner of Customs or Assistant Commissioner of Customs at the port of import
confirming such installation and use of the
capital goods in the importer’s factory
or premises:
Provided that
where the Regional Authority grants extension of the said period beyond six months
from the date of completion of imports, the said overall period shall be extended
by the Deputy Commissioner of Customs or Assistant Commissioner of Customs as the
case may be:
Provided further
that an importer (including an importer who is a CSP) registered with the Central
Excise opting for the independent Chartered Engineer’s certificate shall send a
copy of the certificate, upon its issuance, to the jurisdictional Deputy Commissioner
of Central Excise or Assistant Commissioner of Central Excise, as the case may be,
as intimation or record:
Provided also that in case of import of spares, the installation certificate
shall be produced within three years from the date of import:
Provided also
that in the case of manufacturer exporter and merchant exporter having supporting
manufacturer(s) or in the case of import of irrigation equipment for use in contract
farming for export of agricultural products or in the case of importer rendering
services, the capital goods may be installed at the factory or premises of such
other person whose name and address is endorsed, prior to installation, by the Regional
Authority on the authorisation referred to in condition
(1). This would apply even when Regional Authority endorses a change in the factory
or premises or person. The name and address of such other person shall also be mentioned
on the relevant shipping bills. This shall not apply to a CSP:
Provided also
that agro units located in Agri Export Zones or service
providers in Agri Export Zones may move the capital goods
within the Agri Export Zones under intimation to the jurisdictional
Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise,
as the case may be, subject to the condition that the importer shall maintain accurate
record of such movement;
(10) that the imports and exports 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 sea-port, airport, inland container depot or through a land customs
station within his jurisdiction;
(11) that notwithstanding
anything contained in condition (5) above, where the Regional Authority grants extension
of block-wise period for any block(s) or overall period of fulfillment of export
obligation up to a period of two years or regularization of shortfall in export
obligation, not exceeding five percent of such export obligation, the said block-wise
period or overall period of export obligation shall be extended or condoned by the
Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case
may be:
Provided that
in respect of sick units referred to in the fourth proviso to condition (5) above,
extension of overall period of export obligation shall not be allowed.
3. Where the goods specified in the Table 1 are
found defective or unfit for use, the said goods may be re-exported back to the
foreign supplier within three years from date of clearance of said goods:
Provided that
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 as the goods which were imported.
Explanation – For the
purpose of this notification,-
(A) “Capital goods” has the same meaning as assigned to it in paragraph
9.08 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 Director
General of Foreign Trade, Department of Commerce or State Industrial Infrastructural
Corporation in a Town of Export Excellence;
(C) “Export obligation”,-
(I)
means obligation on the importer to
export to a place outside India, goods manufactured or capable of being manufactured
or services rendered by the use of capital goods imported in terms of this notification and the export obligation shall be over and above
the average level of exports achieved by the importer in the preceding three licensing
years for the same and similar products within the overall export obligation period
including the extended period, if any and such average shall be the arithmetic mean
of export performance in the last three years for the same and similar products:
Provided 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 importer 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
importer shall not be required to maintain the average level of exports subject
to the condition that EPCG 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 this notification 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:
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 exports against only such shipping bills which mention the authorisation number and date of the authorisation
shall be counted for the fulfillment of the export obligation:
Provided also
that in the case of authorisation issued to a CSP, -
(i)
the reference to ‘importer’ 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’;
(ii)
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
(iii) the exports
counted against the authorisation in terms of this notification
shall not be counted towards fulfillment of specific export obligations against
all other authorisations
issued to the CSP or user under Chapter 5 of the Foreign Trade Policy, including
para 5.28 of Handbook of Procedures;
(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 or Advance Authorisation
for annual requirement or Duty Free Import Authorisation
Scheme;
(ii) supply of goods to Export Oriented Units or Software Technology
Parks or Electronic Hardware Technology Parks or Biotechnology Park;
(iii) supply
of goods to projects financed by multilateral or bilateral agencies or funds as notified by Department of Economic Affairs,
Ministry of Finance under International
Competitive Bidding (ICB) in accordance with the procedures of those agencies or
funds, where legal agreements provide for tender evaluation without including customs
duty;
(iv) supply
and installation of goods and equipment (single responsibility of turnkey contracts)
to projects financed by multilateral or bilateral agencies or funds as notified by Department
of Economic Affairs, Ministry of Finance under ICB in accordance with
the procedures of those agencies or funds, where bids may have been invited and
evaluated on the basis of Delivered Duty Paid (DDP) prices for goods manufactured
abroad;
(v) supply
of goods to any project or purpose in respect of which the Ministry of Finance,
by Notification No. 12/2012-Customs dated 17-3-2012, as amended from time to time,
permits import of such goods at zero customs duty subject to conditions specified
in the said Notification and the supply is made under ICB procedure;
(vi) supply
of goods required for setting up of any of the mega power projects specified in
the list 32A at Sl. No. 507 of Notification No. 12/2012- Customs dated 17.03.2012,
as amended from time to time, provided the mega power project conforms to the threshold
generation capacity specified in the said
Notification. The supply should be made under ICB procedure. The ICB condition shall
not be mandatory if the requisite quantum of power has been tied up through tariff
based competitive bidding or if the project has been awarded through tariff based
competitive bidding;
(vii) Supply
of goods to nuclear power projects through National Competitive Bidding (NCB) or
through ICB as provided in clause(h) of para 7.02 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 such services as are specified
in paragraph 5.04(h) of the Foreign Trade Policy.
(D) "Foreign
Trade Policy" means the Foreign Trade Policy, 2015-2020, published by the Government of
India in the Ministry of Commerce and Industry vide notification No. 01/2015-2020, dated the 1st April
2015 as amended from time to time;
(E) “Handbook
of Procedures” means the Handbook of Procedures 2015-20 published by the Government
of India in the Ministry of Commerce and Industry vide public notice No. 01/2015-2020, dated the 1st April
2015 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.
|
Table 1 |
|
|
S. No. |
Description
of goods |
|
(1) |
(2) |
|
1. |
Capital
goods for pre-production, production and post-production |
|
2. |
Capital
goods in Semi Knocked Down (SKD) / Completely Knocked Down (CKD) conditions to
be assembled into capital goods by the importer |
|
3. |
Spare parts 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
required for the existing plant and machinery of the importer |
|
Table 2 |
||
|
S.No. |
Port, ICD,
LCS |
Located
at |
|
1. |
Seaports |
Bedi (including
Rozi-Jamnagar), Chennai, Cochin, Dahej, Dharamtar, Haldia (Haldia Dock complex of Kolkata
port), Kakinada, Kandla, Kattupalli (Tamil
Nadu), Kolkata, Krishnapatnam,
Ennore (Tamil Nadu), Karaikal (Union territory of Puducherry), Magdalla,
Mangalore, Marmagoa, Muldwarka,
Mumbai, Mundra, Nagapattinam,
Nhava Sheva, Okha, Paradeep, Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam
and Vadinar. |
|
2. |
Airports |
Ahmedabad, Bengaluru,
Bhubaneswar, Calicut,
Chennai, Cochin, Coimbatore, Dabolim (Goa), Delhi, Hyderabad,
Indore, Jaipur, Kolkata, Lucknow (Amausi), Mumbai, Nagpur, Rajasansi
(Amritsar), Srinagar, Trivandrum, Varanasi and Visakhapatnam. |
|
3. |
Inland Container Depots |
Agra, Ahmedabad, Anaparthy
(Andhra Pradesh), Melpakkam Village (Arakkonam Taluk, Vellore District),
Babarpur, Bengaluru,
Bhadohi, Bhatinda, Bhilwara, Bhiwadi, Bhusawal, Chettipalayam (Tamil Nadu),
Chheharata (Amritsar), Coimbatore, Dadri, Dappar (Dera Bassi), Daulatabad (Wanjarwadi and Maliwada), Delhi, Dhannad Rau (District
Indore), Dighi (Pune), Durgapur (Export Promotion Industrial
Park), Faridabad, Garhi Harsaru,
Gauhati, Guntur, Hyderabad, Irugur
Village (Tamil Nadu), Irungattukottai (SIPCOT Industrial
Park, Kattrambakkam Village, Sriperumbudur
Taluk, Kanchipuram District,
Tamil Nadu), 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
of District Guntur), Miraj, Moradabad, Nagpur, Nasik,
Patli (Gurgaon), Pimpri (Pune),
Pitampur (Indore), Pondicherry, Raipur, Rewari, Rudrapur (Nainital), Salem, Singanalur, Surat, Surajpur, Talegaon (District Pune), Thudiyalur
(Tamil Nadu), Tirupur, Tondiarpet
(TNPM) in Chennai, Tuticorin, Udaipur, Vadodara, Varanasi,
Veerapandi (Tamil Nadu) 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. |
[F.No.605/55/2014-DBK]