What is the EPCG Scheme?
The Export Promotion Capital Goods (EPCG) Scheme allows businesses to import capital goods at zero customs duty, subject to fulfilling a defined export obligation. It promotes technology upgradation and export competitiveness.
Objective of the EPCG Scheme
– Support technology upgradation
– Reduce cost of capital goods
– Enhance productivity and global competitiveness
– Promote export-led growth
Benefits of EPCG Scheme
– Zero or concessional customs duty
– Applicable to manufacturers and merchant exporters
– Reduces production cost
– Access to advanced machinery
– Supports domestic procurement and import
Who Can Apply?
– Manufacturer exporters
– Merchant exporters with supporting manufacturers
– Service providers (hotels, logistics, IT, healthcare)
– SMEs and large exporters
Types of EPCG Authorisation
– EPCG for Import of Capital Goods
– EPCG for Domestic Procurement
– EPCG under Technological Upgradation
– EPCG for Green Technology Products
Capital Goods Allowed
– Machinery and equipment
– Packaging machines
– CNC machines
– Robots
– Moulds, dies, fixtures
– Spare parts (up to 10%)
– Testing equipment
– Pollution control equipment
Export Obligation (EO)
- Specific Export Obligation: 6 times duty saved within 6 years
- Average Export Obligation: Maintain previous 3-year average exports
Documents Required
– IEC
– GST registration
– DSC
– PAN
– Machinery quotation
– Chartered engineer certificate
– Financial statements
– Export documents
– Factory details
EPCG Application Process
- Prepare documents
- Login to DGFT portal
- Submit online application
- Upload documents
- Pay fee
- DGFT approval
- Download EPCG Authorisation
Compliance After Approval
– Customs endorsement
– Machinery installation certificate
– Export obligation reports
– EODC filing
– Record maintenance
Common Mistakes to Avoid
– Importing wrong machinery
– Delayed installation certificate
– Mismatch in HS codes
– Missing annual returns
– Improper documentation
Why Choose Us?
– Expert DGFT professionals
– End-to-end assistance
– Fast processing
– Export obligation planning
– Support for amendments and EODC
– Affordable pricing
Frequently Asked Questions (FAQs)
1. What is the validity of an EPCG licence?
The EPCG authorisation is generally valid for 18 months for imports.
2. Can merchant exporters apply for EPCG?
Yes, merchant exporters can apply if they have a supporting manufacturer.
3. What if export obligation is not fulfilled?
Unfulfilled obligation may lead to:
- Payment of full customs duty saved
- Interest as applicable
- Penalty from DGFT or Customs
4. Can I transfer the imported machinery?
No, machinery imported under EPCG cannot be sold or transferred until export obligation is fully met.
5. Is domestic procurement allowed?
Yes, capital goods can also be procured from indigenous manufacturers under the EPCG Scheme.
Surrender, Redemption & Regularization Under EPCG Scheme
When you obtain an EPCG Authorisation, you are required to fulfil the export obligation (EO). After completing or choosing not to continue, you may need to opt for Surrender, Redemption, or Regularization.
- EPCG Redemption (EODC Closure)
Meaning:
Redemption refers to the successful closure of the EPCG authorisation after the exporter completes both Specific Export Obligation (SEO) and Average Export Obligation (AEO).
- EPCG Regularization (When EO is Not Fulfilled)
Meaning:
Regularization is the process used when the exporter is unable to complete the export obligation fully or partially.
Instead of penalties or legal complications, DGFT allows the authorisation to be closed by paying proportionate duty + interest.
- EPCG Surrender
Meaning:
Surrender means you decide not to use the EPCG Authorisation and voluntarily return it to DGFT without importing any machinery.
