EXPORT PROMOTION CAPITAL GOODS SCHEME

Subject : Government Schemes

Context : Government considering continuation of export promotion scheme in new trade policy

Concept :

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.
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.