Govt eases certain norms under EPCG scheme to promote ease of doing biz

What is the News?

The Ministry of Commerce and Industry has relaxed various procedures under the Export Promotion Capital Goods(EPCG) scheme in order to reduce compliance requirements and facilitate ease of doing business.

What is the Export Promotion Capital Goods(EPCG) Scheme?

Nodal Ministry: Ministry of Commerce and Industry 

Objective: To facilitate the import of capital goods for producing quality goods and services and enhance India’s manufacturing competitiveness.

Under the scheme, imports of capital goods are allowed duty-free, subject to an Export Obligation(EO).

The Export Obligation(EO) is that the exporter under the scheme has to export finished goods worth six times of the actual duty saved in value terms in six years. At least, 50% of the EO must be fulfilled within the first block of four years.

What are the changes made to the EPCG Scheme?

Extension in the time limit for submitting the Annual Report: The time limit for reporting the fulfilment of EO has been extended from April 30 to June 30. Further, late fees of Rs.5000 per authorization for each financial year would be levied for delay in submission of such report.

Export Obligation(EO): Requests for export obligation extension under the scheme should be made within six months of expiry instead of the earlier prescribed period of 90 days. However, applications made after six months and up to six years are subject to a late fee of Rs 10,000 per authorisation.

Payment of Customs Duty: The facility to pay customs duty through scrips (MEIS /RoDTEP /RoSCTL) for default under EPCG has been withdrawn.

Source: This post is based on the article “Govt eases certain norms under EPCG scheme to promote ease of doing biz” published in Business Standard on 15th April 2022.