Q. With reference to Export Promotion Capital Goods (EPCG) scheme, consider the following statements::
1.It allows duty-free imports of capital goods subject to an export obligation.
2.Second-hand capital goods, without any restriction on age, may also be imported under this scheme.
Which of the statements given above is/are correct?
Answer: C
Notes:
Both statements are correct.
- Statement 1 is correct: Scheme allows import of capital goods for pre-production, production and post-production (including CKD/SKD thereof as well as computer software systems) at 3% customs duty, subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under EPCG scheme, to be fulfilled in 8 years reckoned from Authorization issue-date.
- Statement 2 is correct: The capital goods shall include spares (including refurbished/reconditioned spares), tools, jigs, fixtures, dies and moulds. Second hand capital goods, without any restriction on age, may also be imported under the EPCG Scheme. The export obligation can also be fulfilled by the supply of ITA-1 items to the DTA, provided the realisation is in free foreign exchange.
Source: Article
