EPCG to Common
Service Providers at Nil Duty in FTP 2009-2014
[Customs
Notification No. 101 dated 11th September 2009]
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 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), 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 are imported
for export of engineering and electronic products, basic chemicals and
pharmaceuticals, apparels and textiles, plastics, handicrafts, chemicals and
allied products and leather & leather products and are other than those
required for export of products covered under following
chapters/headings of the First Schedule to the Customs Tariff Act, 1975 (51 of
1975),
namely:-
Chapters 1 to 4,5(other than handicrafts), 6 to 24,25 to 27,
31,40,43,44(other than handicrafts),45,47 to 49,68(other than handicrafts),69 ,
70,71,81 (metals in primary and intermediate forms only),89,93,97(other than
handicrafts),98; headings 7201 to 7212, 7218 to 7220,7224 to 7226,7401 to 7406,
7501 to 7504, 7601 to 7603, 7801 to 7802, 7901 to 7903, 8001 to 8002 and 8401.
(2) that the goods imported are
covered by a valid authorization issued under the Export Promotion Capital
Goods (EPCG) Scheme to Common Service Providers(hereinafter referred to as CSP)
designated by the Director General Of Foreign Trade (hereinafter referred to as
DGFT), Department of Commerce(hereinafter referred to as DOC) or State
Industrial Infrastructural Corporation in Towns Of Export Excellence
(hereinafter referred to as TEE) in terms of Chapter 5 of the Foreign Trade
Policy permitting import of goods at zero customs duty and the said
authorization 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 authorization shall be deemed to be the
period permitted for fulfilment of the export
obligation in full :
(3) that the authorization issued
under the scheme shall have the details of the users of the said capital goods
and the quantum of the Export Obligation(hereinafter referred to as EO) which
each user would fulfil.
(4) that the Common Service
provider or any of the specific users is not currently availing any benefits
under Technology Upgradation Fund Scheme (TUFS)
administered by Ministry of Textiles, Government of India.
(5) that the Common Service provider or any of the specific users does
not avail, in the year of import of the goods, the benefit of Status Holder
Incentive Scheme under Para 3.16 of the Foreign Trade Policy.
(6) that the goods imported shall
not be disposed of or transferred by sale or lease or any other manner till
export obligation is complete.
(7) that the Common Service
provider and each of the specific users shall execute a bond in such form and
for such sum as may be specified by the Deputy Commissioner of Customs or
Assistant Commissioner of Customs and a bank guarantee equivalent to their
portion of duty foregone in terms of export obligation apportioned in the
authorization binding themselves to fulfil export obligation on FOB basis
equivalent to six times the duty saved on the goods imported as may be
specified on the licence or authorization, or for
such higher sum as may be fixed or endorsed by the Licensing Authority or
Regional Authority in terms of Para 5.10 of the Handbook of Procedures Vol I, issued under para 2.4 of the Foreign Trade Policy
within a period of six years from the date of issue of licence
or authorization, in the following proportions, namely :-
|
S.No. |
Period from the date of issue
of Authorization |
Proportion of total export
obligation |
|
(1) |
(2) |
(3) |
|
1. |
Block of 1st to 4th year |
50% |
|
2. |
Block of 5th to 6th year |
50% |
Provided further 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 time
period allowed by the Licensing Authority or 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 time period allowed by the Licensing Authority or Regional
Authority which shall not exceed twelve years.
Provided also that spares (including refurbished/reconditioned spares),
moulds, dies, jigs, fixtures, tools, refractory for initial lining and catalyst
for initial charge, for the existing plant and machinery (imported earlier,
under EPCG or otherwise), shall be allowed to be imported under the EPCG scheme
subject to an export obligation equivalent to 50% of the normal export
obligation prescribed above, to be fulfilled in 6 years reckoned from the date
of issue of the Authorization, subject to the condition that the CIF value of
import of the above spares etc. will be limited to 10% of the CIF value of the
plant and machinery imported under the EPCG authorization or 10% of the book
value of the plant and machinery imported earlier otherwise than under EPCG
Scheme, as the case may be.
Provided also that export obligation of a particular block may be set
off against the excess exports made in the said preceding block(s);
(8) that if the Authorization
Holder
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;
(9) that the
Authorization Holder and the other specific users produce
within 30 days from the expiry of each block from the date of issue of
authorization 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 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 15% per annum from the date of clearance of the goods;
(10) where the Authorization
Holder fulfills 75% or more of the export obligation as specified in condition
(7)
(over and
above 100% of the average export obligation) within half of the period
specified for export obligation as mentioned in condition (7),
his
balance export obligation shall be condoned and he shall be treated to have
fulfilled the entire export obligation;
(11) that the capital goods
imported, assembled or manufactured are installed in the Common Service
Provider’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 Common Service Provider’s factory or premises, within six months from
the date of completion of imports or within such extended period as the Deputy
Commissioner of Customs or Assistant Commissioner of Customs, as the case may
be, may allow :
Provided that in case of import of spares, the installation certificate
shall be produced within three years from the date of import :
Provided further that if the importer is not
registered with central excise, he may produce the said certificate of
installation and usage issued by an independent Chartered Engineer :
(12) that the imports and exports
are undertaken through sea ports at Bedi (including Rozi-Jamnagar), Chennai, Cochin, Dahej,
Dharamtar,Haldia (Haldia
Dock complex of Kolkata port) Kakinada, Kandla, Kolkata, Krishnapatnam,
Magdalla, Mangalore, Marmagoa,
Muldwarka, Mumbai, Mundhra,Nagapattinam,
Nhava Sheva, Okha, Paradeep, Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam
and Vadinar or through any of the airports at
Ahmedabad, Bangalore, Bhubaneswar, Chennai, Cochin, Coimbatore, Dabolim (Goa), Delhi, Hyderabad, Indore, Jaipur, Kolkata,
Lucknow (Amausi), Mumbai, Nagpur, Rajasansi
(Amritsar), Srinagar, Trivandrum and Varanasi or through any of the Inland
Container Depots at Agra, Ahmedabad, Anaparthy
(Andhra Pradesh), Babarpur, Bangalore, Bhadohi, Bhatinda, Bhilwara, Bhiwadi, Bhusawal, Chheharata (Amritsar),
Coimbatore, Dadri, Dappar (Dera Bassi), Daulatabad
(Wanjarwadi and Maliwada),
Delhi, Dighi (Pune),
Durgapur (Export Promotion Industrial Park), Faridabad, Garhi
Harsaru, Gauhati, Guntur,
Hyderabad, Jaipur, Jallandhar, Jamshedpur, Jodhpur,
Kanpur, Karur, Kota, Kundli,
Loni (District Ghaziabad), Ludhiana, Madurai, Malanpur, Mandideep (District Raisen), Miraj, Moradabad,
Nagpur, Nasik, Pimpri (Pune),
Pitampur (Indore), Pondicherry, Raipur, Rewari, Rudrapur(Nainital), Salem, Singanalur, Surat, Surajpur, Tirupur, Tuticorin, Udaipur, Vadodara, Varanasi, , Waluj
(Aurangabad) or through the Land Customs Station at Agartala,
Amritsar Rail Cargo, Attari Road, Changrabandha,
Dawki, Ghojadanga, Hilli, Jogbani, Mahadipur, Nepalganj Road, Nautanva (Sonauli), Petrapole, Ranaghat, Raxaul, Singhabad and Sutarkhandi 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.
(13) notwithstanding anything contained
in condition (9) above, where the Licensing
Authority or Regional Authority grants extension of block-wise period for any
block(s) or overall period of fulfilment 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 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 first proviso
to condition (7) extension of overall period of
export obligation shall not be allowed :
Provided further that the Export Obligation period shall not be extended
beyond 12 years including the original Export Obligation period of 6 years.
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 three 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 case may be, to be the same as the goods which were imported.
4. This notification, for
import of goods specified at Serial Nos.1 and 2 of the said table, shall have
effect upto 31st December,
2011.
Explanation – For the purpose of this notification,-
1. “Capital goods” has the same
meaning as assigned to it in Paragraph of 9.12 of the Foreign Trade Policy;
2. “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.
3. “Export obligation”, -
(1) means obligation on the
Common Service provider and each of the specific users
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. The export obligation shall be over and above the average level
of exports achieved by the Common Service provider or the specific user
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
average shall be the arithmetic mean of export performance in the last 3 years
for the same and similar products.
Provided that upto 50% of the export
obligation may also be fulfilled by export of other good(s) manufactured or
service(s) provided by the Common Service provider or the specific user or his
group company or managed hotel, which has the EPCG authorization subject to the
condition that in such cases, additional export obligation imposed shall be
over and above the average exports achieved by the Common Service provider or
the specific user or his group company or managed hotel in preceding three
years for both the original and the substitute product(s) or 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 and
sericulture, the Common Service provider or the specific user shall not be
required to maintain the average level of exports :
Provided further that in case of export of goods relating to
aquaculture(including fisheries), the Common Service provider or the specific
user shall not be required to maintain the average level of exports subject to
the condition that EPCG authorization 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. 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 former USSR, or to such countries as
notified by Director General of Foreign Trade as on 31.3.08, shall not be
counted for fixing the average level of exports :
Provided also that exports against only such shipping bills which
mention the EPCG authorization No. and date shall be counted for the discharge
of the export obligation;
Provided also that exports counted against the authorization issued
under this notification shall not be counted towards fulfilment
of other specific Export Obligations against other EPCG authorizations;
(2) shall be fulfilled through
physical exports and the export proceeds shall be realized 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 Authorization/Advance Authorization for Annual
Requirement/ Duty Free Import Authorization (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
Department of Economic Affairs (DEA), 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 power
projects and refineries not covered in (iv) above under ICB procedure;
(vi) Supply of goods to nuclear
power projects through competitive bidding as opposed to ICB;
(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.
4. “Foreign
Trade Policy” means the Foreign Trade Policy 2009-2014 published in the gazette
of India, Part II, Section 3, Sub-section (ii) vide notification of the
Government of India in the Ministry of Commerce and Industry, No.1/2009-2014
dated the 27th August, 2009 as amended from time to time;
5. “Licensing Authority or
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 authorized by him to grant an authorization under the said
Act;
6. “Manufacture” has the same
meaning as defined in clause (f) of section 2 of the Central Excise Act, 1944
(1 of 1944).
7. “Towns of Export
Excellence(TEE)” means a selected town producing goods of Rs.750 Crores or more based on potential for growth in exports. However
for TEE in Handloom, Handicraft, Agriculture and fisheries sector the threshold
limit would be Rs.150 Crores.
|
Table |
|
|
S.No. |
Description of goods |
|
(1) |
(2) |
|
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 importer. |
|
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 authorization holder. |
[F. No.605/58/2009-DBK]