Spares Import under EPCG for Domestically Procured Capital Goods not Allowed

[DGFT Policy Circular No. 54 dated 23rd February 2012]

Subject: Import of spares for the existing machinery procured indigenously under EPCG Scheme

Issue of allowing import of spares against Capital Goods procured indigenously against an EPCG Authorization was discussed during the last Port Officers Meeting held on 24-25th November, 2011 wherein it was decided that the matter would be examined separately.

2.  The matter has since been examined. Para 5.2A of Foreign Trade Policy stipulates two options for import of spares for imported Capital Goods

i.   Capital Goods have been earlier imported under EPCG; Spares for these Capitals Goods are allowed under EPCG Scheme.

ii.   Capital Goods have been imported (though EPCG Scheme was not availed for such imports); Spares for these are allowed under EPCG Scheme.

Accordingly, it is clarified that for all types of imported Capital Goods, import of Spares under EPCG Schemes is allowed.

3.  Under Para 8.2 (c) of Foreign Trade Policy, Capital Goods can be procured indigenously upon invalidating an EPCG Authorization. However, domestically procured Capital Goods cannot be treated as ‘imported Capital Goods’ and hence the facility of Para 5.2A of Foreign Trade Policy cannot be allowed for such Capital Goods sourced domestically after invalidating EPCG Authorization.

4.  This issues with the approval of Director General of Foreign Trade.