EPCG Scheme under FTP 2003
Notification
History: Original No. & Date: 55/01.04.2003
Amended by 84/27.05.2003;
97/25.06.2003; 134/27.08.2003; 140/10.09.2003; 29/28.01.2004; 63/14.05.2004;
46/17.05.2005; 77/22.08.2005; 97/17.11.2005; 65/09.05.2008]
Ntfn 55 In exercise of the powers conferred
01.04.2003 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 annexed hereto from so much of the duty of Customs leviable thereon
which is specified in the First Schedule to the Customs Tariff Act, 1975 (51of
1975) as is in excess of the amount calculated at the rate of five percent ad-
valorem and from the whole of the additional duty and special additional duty
leviable thereon respectively under sections 3 and 3A of the said Customs
Tariff Act.
2. The exemption under this notification
shall be subject to the following conditions namely:-
(1) that the goods imported are covered by a valid licence
issued under the Export Promotion Capital Goods (EPCG) Scheme in terms of
Chapter 5 of the Export and Import Policy permitting import of goods at the
rate of five percent duty and the said licence is produced for debit by the
proper officer of customs at the time of clearance:
Provided
that for import of spare parts specified at Sr.No.4 of the said Table, the
validity period of the licence shall be deemed to be the period permitted for
fulfilment of the export obligation in full;
(2) 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
fulfil export obligation on FOB basis equivalent to eight times the duty
saved on the goods imported as may be specified on the licence, or for
such higher sum as may be fixed by the Licensing Authority, within a period of
eight years from the date of issue of licence, in the following proportions,
namely:-
|
SNo. |
Period from the date
of issue of licence obligation |
Proportion of total
export |
|
(1) |
(2) |
(3) |
|
1. |
Block of 1st and 2nd year |
Nil |
|
2. |
Block of 3rd and 4th year |
15% |
|
3. |
Block of 5th and 6th year |
35% |
|
4. |
Block of 7th and 8th year |
50% |
Provided
that where the duty saved is not less than Rs.100 crores, or where the licence
is issued to units in the agri export zone as may be notified by the licensing
authority, the export obligation shall be fulfilled with a period of twelve
years from the date of issue of licence in the following proportions, namely:-
|
SNo. |
Period from the date
of licence |
Proportion of total
export obligation |
|
(1) |
(2) |
(3) |
|
1. |
Block of 1st, 2nd ,3rd ,4th and 5th year |
Nil |
|
2. |
Block of 6th,7th and 8th year |
15% |
|
3. |
Block of 9th and 10th year |
35% |
|
4. |
Block of 11th and 12th year |
50% |
Provided further that where a sick unit is notified by the
Board for Industrial and Financial Reconstruction 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 in terms of Paragraphs
5.5.1 of the Export and Import Policy.
Provided
also that export obligation of a particular block may be set off against the
excess exports made in the said preceding block(s);
(3) that the importer produces within
30days from the expiry of each block from the date of issue of licence 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 preceding condition, the
importer shall within three months from the expiry of the said block pay duties
of customs of an equal amount equal to that portion of duties leviable on the
goods but for the exemption contained herein which bears the same proportion as
the unfulfilled portion of the export obligation bears to the total export
obligation together with interest at the rate of 15 % per annum from the
date of clearance of the goods;
(4) that the capital goods imported,
assembled or manufactured are installed in the importer’s factory or premises
and a certificate from the jurisdictional Deputy Commissioner of Central Excise
or Assistant Commissioner of Central Excise, as the case may be, is produced
confirming installation and use of capital goods in the importer’s factory or
premises, within six months from the date of completion of imports or within
such extended period as the said Deputy Commissioner of Customs or Assistant
Commissioner of Customs may allow:
Provided
that in the case of,-
(i) manufacturer
exporter and merchant exporter having supporting manufacturer (s) or vendor(s);
(ii) import of
irrigation equipment for use in contract farming for export of agricultural
products; and
(iii) importer
rendering services;
the
capital goods may be installed at the factory or premises of such other person
whose name and address are endorsed on the licence referred to in condition (1)
and where the bond for full difference of duty, if necessary, in terms of
condition (2) , with a bank guarantee is executed by the importer and such
other person binding themselves jointly and severally to fulfil the export
obligation and all other conditions of this notification and to pay duty with
interest at the rate of 15% per annum in case of default;
(5) that the imports and exports are
undertaken through sea ports at Mumbai, Kolkata, Cochin, Magdalla,
Kakinada, Kandla, Mangalore, Marmagoa, Madras, Nhava Sheva, Paradeep, Pipavav,
Sikka, Tuticorin, Visakhapatnam, Dahej, Mundhra, Nagapattinam, Okha Bedi
(including Rozi - Jamnagar), Muldwarka, Porbander Dharamtar, Vadimar, Haldia
(Halida Dock Complex of Kolkata Port) and Krishnapatnam or through any of the airports
at Ahmedabad, Bangalore, Bhubaneswar, Mumbai, Kolkata, Coimbatore, Delhi,
Hyderabad, Jaipur, Madras, Srinagar, Trivandrum, Varanasi, Nagpur, Cochin,
Rajasansi (Amritsar), Lucknow (Amausi), Indore and Dabolim (Goa) or through any
of the Inland Container Depots at Agra, Bangalore, Coimbatore, Delhi,
Faridabad, Gauhati, Guntur, Hyderbaad, Jaipur, Jallandhar, Kanpur, Ludhiana,
Moradabad, Nagpur, Pimpri (Pune), Pitampur (Indore), Surat, Tirupur, Varanasi,
Nasik, Rudrapur (Nainital), Dighi (Pune), Vadodara, Dauladtabad, (Wanjarwadi
and Maliwada), Waluj (Aurangabad), Anaparthy (Andhra Pradesh), Salem, Malanpur,
Singanalur, Jodhpur, Kota, Udaipur, Ahmedabad, Bhiwadi, Madurai, Bhilwara,
Pondicherry, Garhi Harsaru, Bhatinda, Dappar (Dera Bassi), Chheharata
(Amritsar), Karur, Miraj, Rewari, Bhusawal, Jamshedpur, Surajpur, Dadri,
Tuticorin, Kundli, Bhadohi, Raipur, Mandideep (District: Raisen), Durgapur
(Export Promotion Industrial Park), Babarpur and Loni (District Ghaziabad) or
through the Land Customs Station at Ranaghat , Singhabad, Raxaul.,
Jogbani, Nautanva (Sonauli), Petrapole, Mahadipur, Nepalganj Road, Dawki,
Agartala, Sutarkhandi, Amritsar Rail Cargo, Attari Road, Hilli, Ghojadanga and
Changrabandha or Special Economic Zone as specified in the notification issued
under section 76A of the Customs Act 1962 (52 of 1962). [Amended by
46/17.05.2005; 77/22.08.2005; 97/17.11.2005; 41/05.05.2006; 63/04.05.2007;
116/30.11.2007; 19/24.02.2009]
(6) notwithstanding anything contained in
condition (3) above, where the Licensing Authority grants extension of block –
wise period for any block(s) or overall period of fulfillment of export
obligation upto 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/
condoned by the Deputy Commissioner of Customs or Assistant Commissioner of
Customs, as the case may be:
Provided
that in respect of sick units as specified in the second proviso to condition (2)
above, extension of overall period of export obligation shall not be allowed.
3. Where the goods specified in the said
Table are found defective or unfit for use, the said goods may be re-exported
back to the foreign supplier within 3 years from the date of payment of duty on
the importation thereof:
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
goods which were imported.
4.
where the total
exports of a sector or product group during the year 2007- 08 has declined by
more than 5% as compared tothe year 2006-07, the average export obligation of
the licencee for 2007-08 may be reduced proportionate to the reduction in
exports of that particular sector/product group during 2007-08 as against
2006-07. [Inserted by 65/09.05.2008]
Table
|
SNo. |
Description of goods |
|
(1) |
(2) |
|
1. |
Capital goods for
pre production, production and post production including second hand capital goods
upto 10 years old. |
|
2. |
Capital goods in
SKD/CKD conditions to be assembled into capital goods by the importer. |
|
3. |
Components of
capital goods required for assembly or manufacture of capital goods by the
importer. |
|
4. |
Spare parts of goods
specified at Serial Nos.1,2,and 3 as actually imported and required for
maintenance of capital goods so imported, assembled, or manufactured. |
|
5 |
Spares for the
existing plant and machinery of the licence holder. |
Explanation - In this notification,-
(1)
“Capital Goods” has
the same meaning as assigned to it in Paragraph 9.10 of the Export and Import
Policy;
(2)
“Export and Import
Policy” means the Export and Import Policy 2002-2007 published vide
notification of the Government of India in the Ministry of Commerce and
Industry, No.1/2003 dated the 31st
March, 2003 as amended from time to time;
(3)
“Licensing 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 a licence under the said Act;
(4)
“export obligation”,
-
(i)
in relation to importers other than those rendering services, means exports, to
a place outside India, of products manufactured with the use of capital goods
imported, assembled or manufactured in terms or this notification:
Provided
that export obligation may also be fulfilled by ,-
(a)
export of same products capable or being manufactured with the use of said
capital goods; or
(b)
export of same product manufactured in different units of the licence holder;
or
(c)
through third party exports made by an exporter or manufacturer on behalf of
the licence holder by exporting the same product and in such cases, inter-alia
the Shipping bills shall indicate name of both the third party and the licence
holder; or
(d)
making supplies of same product in terms of sub- paragraphs (a) (b) (d) (e) (f)
(g) (h) (i) and (j) of paragraph 8.2 of the Export and Import Policy; or
(e)
export of other goods manufactured by the importer.
(ii)
in relation to importers rendering services, means, receiving payments in
freely convertible foreign currency for services rendered through the use of
capital goods.
Provided
that in respect of units holding license both as manufacturer exporter and
service provider, the export obligation may be fulfilled either by export of
products specified in clause (i) or by receiving payments in freely convertible
foreign currency for services rendered through the use of such capital goods.
Provided
further that in respect of group companies as defined in the Companies Act,
1956 (1 of 1956), where licence has been issued to any one of the group
company, the export obligation may also be fulfilled by export of any
goods/services by any other company(s) belonging to the said group:
Provided
also that in respect of service providers in the Port Handling sector, the
export obligation may be fulfilled by earning service charges in Indian rupees which
are otherwise considered as free foreign exchange by the Reserve Bank of
India”.
(iii)
shall be, over and above, the average level of exports achieved by the licencee
in the preceding three licencing years for same and similar products. [Inserted
by 65/09.05.2008]