EPCG 1992-97 – 15 Percent Duty
Ntfn 110 In exercise of the powers 15 0 15
05.06.95 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 as 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 (51 of 1975) as
is in excess of the amount calculated at the rate of 15% advalorem and whole
of the additional duty leviable thereon under section 3 of the said Customs
Tariff Act, subject to the following conditions, namely:-
(1)
The goods imported are covered by a valid licence issued on or after 1st May,
1995 under the Export Promotion Capital Goods (EPCG) scheme in terms of Export
and Import Policy (hereinafter referred to as the said Policy) permitting
import on payment of duty on customs at the rate of 15% and the said licence is
produced for debit by the proper officer of the customs at the time of
clearance;
[Provided
that for the import of spare parts, the validity period of the licence shall be
deemed to be the period permitted for fulfillment of the export obligation in
full]. Inserted by 69/10.09.96.
(2)
The importer at the time of clearance produces to the Assistant Commissioner
of Customs a certificate from the Licensing Authority for having executed a
legal undertaking in terms of paragraph 45 of the said policy; Omitted by
146/19.09.95
(3) The importer executes a bond in
such form and for such sum and with such surety or security as may be specified
by the Assistant Commissioner of Customs binding himself to fulfill export
obligation equivalent to four times the CIF value of the goods imported, or for
such higher sum as may be fixed by the Licensing Authority, within a period of
five years form the date of issue of the said licence in the following
proportions:-
|
SNo. |
Period
from the date of issue of licence |
Proportion
of total export obligation |
|
1. |
1st
year |
Nil |
|
2. |
2nd
year |
10% |
|
3. |
3rd
year |
20% |
|
4. |
4th
year |
30% |
|
5. |
5th
year |
40% |
Provided that export obligation of a particular year may
be set off by the excess exports made in the preceding years.
(4)
The importer produces within thirty days of the expiry of each year from the
date of issue of licence from 2nd year or within such extended period as the
Assistant Commissioner of Customs may allow, evidence to the satisfaction of
the Assistant Commissioner of Customs showing the extent of export obligation
fulfilled, and where export obligation of any particular year is not fulfilled
in terms of the preceding condition, the importer shall within three months
from the expiry of the said year pay an amount equal to that portion of the
duty 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 rate of 15% per
annum from the date of clearance of the goods.
(5) The importer shall, if he fails to discharge a
minimum of 25% of the export obligation prescribed for any particular year, for
three consecutive years, be liable to pay forthwith the whole of the duty of
customs leviable on the goods imported but for the exemption contained in this
notification together with interest rate of 15% per annum from the date
of clearance of the goods; [Amended by 113/16.10.2002]
(6) The capital goods imported, assembled or manufactured
are installed in the importer’s factory or premises and a certificate from the
jurisdictional Assistant Commissioner of Central Excise or independent
Chartered Engineer, 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
Assistant Commissioner of Customs may allow.
[Condition No. 6 substituted by 42/30.06.98]
Provided that the capital goods may be installed in the
factory of another manufacturer whose name and address are endorsed on the
licence referred to in condition (1) where the bond for the full difference of
duty in terms of condition (3), with a Bank Guarantee is executed by the
importer and such manufacture binding themselves jointly and severely to
fulfill the export obligation and all other conditions of this notification and
to pay duty with interest in case of default.
“(7) Notwithstanding anything contained in conditions (3)
and (4), where the Licensing Authority grants an extension of year wise period
or overall period of fulfillment of export obligation or regularisation of
shortfall, in export obligation, not exceeding 5% of such export obligation,
the said year wise period or overall period of export obligation may be
extended and the said shortfall in export obligation be condoned by the
Assistant Commissioner of Customs:
Provided that extension of year wise period of export
obligation shall not be allowed more than once and more than a period of one
year within a period of five years”. [Condition No. 7 substituted by
56/11.05.99]
Provided
further that where the Licensing Authority grants further extension of the
period for fulfilment of export obligation beyond the period as specified in
this condition, then, subject to the satisfaction of such conditions as may be
specified in a Public Notice of the Government of India in the Ministry of
Commerce and Industry in this regard, such export obligation may be extended,
but shall in no case be extended beyond the 31st day of March, 2004. [Inserted
by Third Schedule Finance Bill 2003]
|
Table |
|
|
SNo. |
Description
of goods |
|
1. |
Capital goods |
|
2. |
Capital goods in
SKD/CKD condition 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 |
Explanation: in this notification,-
(i) “Capital goods” means any plant, machinery,
equipment and accessories required for -
(a) manufacture of production of other goods, including
packaging machinery and equipment, refractories, refrigeration equipment, power
generating sets, machine tools, catalysts for initial charge, and equipment and
instruments for testing, research and development, quality and pollution
control;
(b) use in manufacturing, mining, agriculture,
aquaculture, animal husbandry, floriculture, horticulture, pisciculture,
poultry and sericulture;
(ii) “Export and Import Policy” means the Export
and Import Policy 1 April 1992 - 31 March 1997 (Revised Edition: March 1995)
published vide notification of the Government of India in the Ministry of
Commerce, No. 1(RE-95)/92-97 dated the 31st March, 1995;
(iii) “Licensing Authority” means the Director
General, 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;
(iv) “CIF value”, in relation to second
hand capital goods, means the CIF value of the corresponding new capital goods;
Omitted by 154/27.10.95
(v) “Export obligation”, in relation to importers
other than those rendering service, means export to a place outside India of
products manufactured with the use of capital goods imported, assembled or
manufactured in terms of this notification, or making of supplies of such products
in terms of clauses (a), (c), (e), (f) and (i) of paragraph 121 of the Export
and Import Policy and para 10.2(g) of the Export and Import Policy 1997-2002
corrected upto 13th April, 1998, and in relation to importers rendering
services, means receiving payments in freely convertible foreign currency for
services rendered through the use of such capital goods.
Notification History: Original No/date:
110/05.06.95
Amended by 131/25.08.95 - The condition regarding receipt
of payment in foreign exchange from abroad for services export has been
relaxed. Now payment can be received from India also.
146/19.09.95; 154/27.10.95; 31/17.06.96; 69/10.09.96;
95/1912.96; Amended by 08/23.04.98. Spare parts at Sl no 4 of table upto 20
percent of the value of capital goods at Sl no 1-3 in the table allowed;
42/30.06.98; 113/16.8.02
75/09.10.98
- Capital goods including jigs, fixture, dies and moulds have been omitted from
the EPCG scheme concessional duty notifications. The concession is applicable
only on spares import; 56/11.05.99