EPCG Scheme (Export Promotion Capital Goods) helps increase India's export competitiveness by allowing the import of capital goods needed for making high-quality products, this program lets businesses import capital goods duty-free for use in pre-production, production, and post-production processes.
EPCG Scheme (Export Promotion Capital Goods Scheme)
Under this scheme, importers who are export-oriented businesses can import capital items at zero percent customs charge. The program is subject, nevertheless, to an export value within six years of the date the permit is issued, which is equal to six times the duty saved on the importation of such capital goods.
Put simply, the corporation is forced to import foreign money equivalent to 600% of the duty savings on such imports evaluated in domestic currency. Following the application for the Export Promotion Capital Goods Scheme, this must be completed within six years.
Compliance:
The Director General of Foreign Trade (DGFT) is the licensing authority that issues licenses. The following self-certified copies must be submitted with ANF 5B:
- Code for Import Export (IEC)
- Certificate of Registration and Membership (RCMC)
- electronic signature
- The Tourism Department's registration certificate and the Excess Pan Card Registration (in the event that it is registered)
- GST Certificate of Registration and Proforma Invoice
- Pamphlet
- Copy of Self-Certified Work + Original Chartered Accountant Certificate + Original Chartered Engineer Certificate
Extension of the time limit
The exporter may request an extension of the time restriction, but only in extraordinary circumstances when he can provide adequate evidence or proof that the reasons beyond his control prevented him from meeting the deadline.
Penalty in case of Non-Compliance
Should the license holder under the EPCG system neglect to fulfill the specified export obligation, they would be responsible for paying the customs duties to the customs authority along with an annual interest rate of 15%.
Selling goods in the Domestic Tariff Area (DTA)
Only this company is permitted to sell the items in the Domestic Tariff Area if the exporter complies with his export obligations and reaches the deadline.
Exemption from IGST & Compensation Cess under EPCG scheme
Merchant exporters must pay IGST and request a refund under the Goods and Services Tax regime. By Notification No. 54/2015-20, the DGFT modified the Foreign Trade Policy (FTP) and prolonged the exemption from IGST and Compensation Tax under the EPCG Scheme until October 1, 2018. Exporters who are stressed out about refunds under the GST regime will receive much-needed comfort from this action.
How SKMC Global can assist you ?
When it comes to Export Promotion Capital Goods (EPCG) programs and other export-oriented initiatives, SKMC Global, as a service provider, is crucial in helping firms make the most of these schemes. Exporters can import capital goods at reduced or zero customs tax under the EPCG plan, which is usually supplied by governments, as long as they promise to export commodities multiple times the value of the imported capital goods within a given time frame. As a service provider, we play the following roles, which are explained in the context of
Advisory and Consultation Services:
We help businesses make the most of the EPCG system by offering expert advice. Our advisor team goal is to guide businesses in creating their export strategy while ensuring they understand the benefits, eligibility criteria, and responsibilities under the EPCG scheme. We also assist with preparing and submitting the EPCG application to the right authorities, ensuring all necessary documents, like export obligations and capital goods import details, are properly prepared & submitted.
Liaison with Government Authorities:
We act as a bridge between businesses and government bodies like the Directorate General of Foreign Trade (DGFT), we help with communication, track application progress, & assist in solving any issues that arise during the approval process.
Compliance Management:
We assist the firms in adhering to the scheme's rules and conditions after the EPCG license is obtained. This include keeping track of export commitments, making sure the business exports in the allotted amount of time, and handling any necessary reporting or paperwork. the copious paperwork needed to comply with the EPCG plan, which includes keeping track of imports, exports, and duty saved with us. We also help with the preparation of the recurring reports that need to be filed to the government in order to prove that the scheme's obligations are being followed.
Customs and Duty Management:
As service providers, we help with the EPCG scheme's capital goods import procedure, making sure that the import is carried out with the relevant duty reductions or exemptions. In addition to managing customs clearances, we make sure that all applicable import laws are followed.
Export Obligation Tracking and Fulfillment:
We support your companies by keeping an eye on and recording the export duties during the life of the EPCG license. This entails keeping track of all exports done under the program, figuring out how much exports are needed to meet requirements, and giving regular updates to make sure companies are staying on schedule.
Risk Management and Legal Compliance:
We guide the businesses through the possible pitfalls of non-compliance, like fines or license revocation from the EPCG. This involves offering legal compliance advice and, if required, defending the business in negotiations or legal battles with government agencies.
Audit Support:
In the event that a government audit is carried out to confirm adherence to the EPCG plan, we help with audit preparation, supply of required paperwork, and assurance that all conditions have been fulfilled.
Post-Obligation Services:
Our staff continues to help businesses even after they have completed their export responsibilities by helping them obtain a redemption or discharge certificate from the government. This formally ends the EPCG authorization and attests to the fact that all requirements have been fulfilled.
Global Market Insights and Strategy:
Our EPCG scheme advisors also provide valuable insights into international markets for businesses looking to expand globally, by helping companies adjust their export strategies to match global demand trends. Simply put, as your partner in the Export Promotion Capital Goods (EPCG) program, we guide businesses through the application, compliance, & fulfillment process.