The government has modified several processes under the Export Promotion Capital Goods (EPCG) scheme, which permits duty-free capital goods imports subject to an export obligation, to reduce compliance burdens and make doing business easier.
In six years, exporters must export finished goods worth six times the actual duty savings in value terms.
Requests for export obligation extensions must now be made within six months of the expiration date, rather than the previous 90 days, as per the revisions announced by the commerce and industry ministry. However, late fees of Rs 10,000 per authorization are charged for applications submitted beyond six months and up to six years.
The changes also require yearly reporting of export obligation (EO) by June 30 instead of April 30 each year, with specified details, and a late fine of Rs 5,000 for each delay.
"To improve ease of doing business and decrease the strain of people complaining, certain provisions of Chapter 5 of the Handbook of procedures (2015-20) related to the EPCG scheme are amended for EPCG authorizations issued under Foreign Trade Policy (2015-20)," the Directorate General of Foreign Trade said in a public notice.
Furthermore, requests for block-wise export obligation extensions must be submitted within six months of the expiration date, while applications submitted after six months and for up to six years will be charged a late fee of Rs 10,000 per authorization.
After six years, applications would be subject to a cost of Rs 5,000 each year. Previously, there was no set time limit, which led to entirely discretionary interpretations.
Furthermore, the option to pay customs duty via scrips (MEIS/RoDTEP/RoSCTL) for EPCG default has been withdrawn.
