‘Export Promotion Capital Goods Scheme to boost manufacturing in India’: CR Chaudhary
The central government has been implementing the Export Promotion Capital Goods Scheme (EPCG) in order to facilitate import of capital goods for producing quality goods and services and enhance India’s manufacturing competitiveness, said CR Chaudhary, Minister of State of Commerce and Industry, in an official statement.
The Minister added, “The Export Promotion Capital Goods Scheme under the Foreign Trade Policy is being implemented for manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers.”
Under the scheme, EPCG authorisations 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 obligations equivalent to six times of duties, taxes, and cess saved on capital goods, to be fulfilled in six years from the date of issue of authorisation.
In addition to this, the authorisation holder is required to fulfill an average export obligation achieved by him/her in the preceding three licensing years for the same and similar products, the statement added. However, if at least 75 percent of a specific export obligation and 100 percent of the average export obligation is fulfilled within half the original export obligation period, the remaining export obligation can be condoned.
In case of indigenous sourcing of capital goods and for exports of green technology products, the specific export obligation is only 75 percent. And for units located in the North East Region and Jammu and Kashmir, specific export obligation is only 25 percent. At present, capital goods that are imported for physical exports are also exempt from IGST and compensation cess until March 31, 2019.
According to the statement, the number of defaulters reported in the last three years was 1,347 in 2015-16, 1,122 in 2016-17, and 1,031 in 2017-18. The regional authorities have taken penal action by issuing show cause notices and passing adjudication orders for recovery of customs duty along with interest.