Export Promotion Capital Goods Scheme

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About Export Promotion Capital Goods Scheme

In order to facilitate import of capital goods for producing quality goods and services and enhance India’s manufacturing competitiveness, the Central Government has been implementing a Scheme called the Export Promotion Capital Goods Scheme.
The scheme allows import of capital goods for pre production, production and post production (including CKD/SKD thereof as well as computer software systems) at 5% Customs duty subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under EPCG scheme to be fulfilled over a period of 8 years reckoned from the date of issuance of licence.
Capital goods would be allowed at 0% duty for exports of agricultural products and their value added variants.
Under the Scheme, EPCG Authorizations are issued with actual user condition and import validity of 24 months to import capital goods (except those specified in negative list) for pre-production, production and post-production at zero customs duty.
It is subject to fulfilment of specific Export Obligation equivalent to 6 times of duties, taxes and cess saved on capital goods, to be fulfilled in 6 years from date of issue of Authorization.
Authorization holder is required to fulfil Average Export Obligation achieved by him in the preceding three licensing years for the same and similar products.
However, if minimum 75% of specific Export Obligation and 100% of Average Export Obligation is fulfilled within half the original export obligation period, remaining export obligation can be condoned.

EPCG for Projects

An EPCG licence can also be issued for import of capital goods for supply to projects notified by the Central Board of Excise and Customs
The export obligation for such EPCG licences would be eight times the duty saved.

Eligibility

The scheme covers manufacturer exporters with or without supporting manufacturer(s)/ vendor(s), merchant exporters tied to supporting manufacturer(s) and service providers.

Conditions for import of Capital Goods