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Export Promotion Capital Goods Authorisation (EPCG licence)

What is the EPCG scheme?

EPCG, the acronym for Export Promotion Capital Goods is a scheme that boosts the competitiveness of India's export by helping the country import quality capital goods to produce high quality goods and services.

The Export Promotion Capital Goods Scheme (EPCG) initiated by the Government of India is a part of the Foreign Trade Policy 2015-2020. The scheme allows the import of capital goods for pre-production, production, and post-production at 0% customs duty.

Objectives of EPCG Scheme

The objective of the EPCG (Export Promotion Capital Goods) Scheme is to accelerate the import of capital goods for producing high quality goods and services and enhance the country's manufacturing competitiveness.

Features of EPCG Scheme
  • Manufacturers or Merchant Exporters with supporting manufactures are allowed to import capital goods at 0% customs duty. The authorization holders to enjoy 0% customs duty need to undertake export obligation equivalent to 6 times the amount saved on taxes and duties on capital goods.
  • The imported capital goods cannot be sold or transferred until the export obligation is fulfilled.
  • The installation of capital goods should be done within 6 months from the date of imports.
  • The authorization holders need to file a bond with the customs before the import of capital goods with or without a bank guarantee.
  • The EPCG scheme doesn't cover second-hand goods
  • Exports filing to meet the export obligation have the privilege to take advantage of schemes under Chapter - 3 & Chapter - 4 also.
Export Obligations under EPCG Scheme
EPCG Consultants
  • To avail of 0% customs duty under the EPCG Scheme, the authorization holder needs to fulfil the export obligation of 6 times of duty saved value in the span of 6 years.
  • Firstly, the authorized holder has to fulfill the export obligation for exporting goods or services on the issue of EPCG authorization.
  • The export obligation has to be more than the average export level achieved by the applicant in the past 3 licensing years for similar kinds of products.
Coverage of EPCG Scheme
  • Manufacturer exporters regardless of the presence of supporting manufacturer(s),
  • Merchant exporters linked with supporting manufacturers and service providers.
  • The scheme also covers service providers who are certified as CSP (Common Service Provider) by the DGFT, State Industrial Infrastructure Corporation or Department of Commerce in subject to provisions and conditions of Foreign Trade Policy 2015-2020.
  • Supporting manufacturers shall be endorsed on the EPCG Authorization before installing capital goods in the factory.
Application Form
  • You can apply for the scheme by selecting the head office or registered office, or manufacturing unit or branch office of an eligible exporter to RA concerned in ANF 5A with the documents mentioned.
  • RA concerned shall issue EPCG authorization on the basis of the nexus certificate submitted by the applicant is Appendix 5A.

No time to register yourself under the EPCG scheme? Look for the best EPCG consultants who can take your job. We, Enrich Services, is the most trusted EPCG consultants that can make your job easier and help you start your business in no time. Get in touch!

Eligibility of Capital Goods Under EPCG Scheme

Let's have a look at the list of capital goods eligible for 0% customs duty.

Any equipment, accessories, plant, or machinery needed for production or manufacturing or rendering services come under capital goods. Eligible capital goods under the EPCG scheme are:

  • Any machinery, accessories, plant or equipment. This includes packaging equipment, machinery, machine tools, refrigeration equipment, instruments, equipment needed for R&D, testing, pollution control and quality.
  • Dies, tools, spares, fixtures, jigs, moulds and refractories to use in the initial lining.
  • Catalysts for the charge.

Capital Goods that are not eligible for EPCG Scheme are:

epcg eodc consultants

Thus the beneficial scheme allows you to enjoy duty free import of capital goods. Looking for the best EPCG Licensing Consulting Services in Hyderabad? We are one of the best EPCG consultants with a team that has decades of experience in the industry. We provide valued and flexible DGFT and industrial subsidy services to make the business easier for you. Talk to us and let us understand your needs before we deliver our smooth services.

At Enrich Services What We Do

At Enrich Professional Services, we give you a detailed explanation explaining the terms and conditions of the EPCG scheme concerning export obligation. This will prevent you from making any future mistakes. We help you in preparing documentation for the EPCG License application. The license is obtained from the Director General of Foreign Trade. Furthermore, there is guidance in the requirement and compliance followed by the Clients once the authorization is issued. Getting Redemption Letter from DGFT RA and release of Bond/BG after fulfilling the export obligation from Customs.

Frequently Asked Questions on Importer-Exporter Code (IEC)/(E-IEC)

EPCG stands for Export Promotion Capital Goods. The objective of this scheme is to facilitate the import of capital goods with the purpose of producing quality goods and services to enhance India’s export competitiveness. EPCG scheme allows the import of capital goods for pre-production, production, and post-production at zero customs duty.

YManufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service provider(s); and service providers. Refer to FTP and HBP for the latest details.

  • Your user profile must be linked with an IEC.
  • A valid DSC / e-sign must be registered in the system. You may verify the same from My Dashboard > View and Register Digital Signature Token.
  • GSTN details correspond to the branches of the IEC. The same may be added from Services > IEC Profile Management > Modify IEC.
  • Valid RCMC details issued to the IEC.

If your IEC is in DEL, you shall be allowed to proceed with the submission of your request for issuance of an EPCG authorization, however, your application shall only be actioned upon once your IEC is removed from DEL.

Refer to FTP and HBP for the latest details. The export obligation under the Export Promotion Capital Goods Scheme is required to be fulfilled by the export of goods/services rendered by you. There are two types of export obligations that the authorization holder is obligated to complete:

  • Annual average export obligation: The export obligation is over and above, the average level of export achieved by you as an authorisation holder in the preceding three licensing years for the same and similar products within the overall export obligation period including the extended period (if any). Such an average would be the arithmetic mean of export performance in the previous three years for the same and similar products.
  • Specific export obligation: Specific export obligation is calculated as six times the duty saved amount. You must fulfill a minimum of 50% of export obligation in each block of years, i.e., the first block being the first 4 years and the second block is of the remaining 2 years.

Capital Goods for the purpose of the EPCG scheme shall include:

  • Capital goods as defined in Chapter 9
  • Computer systems and software which are a part of the capital goods
  • Spares, molds, dies, jigs, fixtures, tools & refractories
  • Catalysts for initial charge plus one subsequent charge

Please follow the below steps to check the status of a submitted application for EPCG

  • My Dashboard > Submitted Applications
  • Enter the Type of Scheme (Select in the dropdown: Export Promotion Capital Goods (EPCG)) and Type of Sub Scheme (Issuance of EPCG Authorisation/Post-Export EPCG Authorisation)
  • Click on Search
  • In the search results, please find the status of the submitted application under the column File Status

You can export either directly or through a third party(s). Export proceeds are to be realized in freely convertible currency except for deemed exports. Import of capital goods imported under the EPCG scheme shall be subject to Actual user conditions until the export obligation is completed.

Post Export EPCG Duty Credit scrip(s) shall be available to exporters who intend to import capital goods on full payment of applicable duties, taxes, and cess in cash and choose to opt for this scheme.

  • The basic customs duty paid on capital goods are remitted in the form of freely transferable duty credit scrip(s) under this scheme. This script shall be similar to that issued under Chapter 3 of FTP.
  • The specific export obligation shall be 85% of the applicable specific export obligation under the EPCG scheme. However, the average export obligation shall remain unchanged.
  • The duty remission shall be in proportion to the EO fulfilled.
  • All provisions for utilization of the duty credit scrip(s) shall be applicable to Post Export EPCG Duty Credit Scrip(s) as under Chapter 3 of FTP.
  • All provisions of the existing EPCG scheme shall apply in so far as they are not inconsistent with this scheme.

To avail of benefits under the Post Export EPCG Duty Credit Scrip, please follow the below steps:

  • Services > EPCG
  • Click on Apply for EPCG/Post Export EPCG authorization
  • Now apply for the issuance of a post-export EPCG authorization by choosing Post Export EPCG under the Application for the field.
  • Post issuance of the authorization, start with your exports against the authorization number issued to you.
  • After completion of your exports, you may apply for the issuance of a Post Export Duty Credit Scheme by proceeding for Closure.

Please follow the below path to apply for the issuance of an EPCG/Post Export EPCG authorization:

  • Services > EPCG
  • Click on Apply for EPCG/Post Export EPCG (ANF – 5A)

You may complete your export obligation by the export of either services or products. While applying for the issuance of the authorization, you must select whether the item of export is a service or a product against each item of export.

Yes, you may import/export multiple items that are of the same or similar nature, under a single EPCG authorization.

Imports under the EPCG authorisation shall be subject to an export obligation equivalent to six times the duties, taxes, and cess saved on the capital goods, to be fulfilled in six years reckoned from the date of issuance of the authorisation.

EPCG authorisation shall be valid for imports for 18 months from the date of issuance of the authorisation.

Following is the list of documents/attachments that are mandatory to apply for the issuance of an EPCG authorisation:

  • Self-certified copy of MSME/IEM/LOI/IL in case of products or a self-certified copy of Service Tax Registration in case of Service Providers.
  • Certificate from a Chartered Engineer in the format given in Appendix 5A.
  • Certificate from a Chartered Accountant/Cost Accountant/Company Secretary in the format given in Appendix 5B.
  • In case of Import of spares, tools, refractories, and catalysts for existing plant and machinery, a list of plant/machinery imported and already installed in the factory/premises of the applicant firm/ supporting manufacturer for which the above items are required, duly certified by a Chartered Engineer or jurisdictional Central Excise authority.
  • In the case of EPCG applications made by EOU/SEZ units, a self-certified copy of the ‘No Objection Certificate’ from the Development Commissioner concerned showing the details of the capital goods imported/indigenously procured by the applicant firm, its value at the time of import/sourcing and the depreciated value for the purpose of assessment of duty under the Scheme is to be submitted.

You may add new items, increase or decrease the number of items, duty saved/duty paid amounts, modify the UOM, Nature of capital goods sought to be imported, and the Primary use of the capital goods, request for transfer of capital goods from.

Please follow the below steps to request for an amendment to the authorization:

  • Services > EPCG
  • Click on Amendment of fields of EPCG Authorisation
  • Select the authorization for which the modification is proposed from the list given.

Please note that a fresh nexus certificate signed by a Chartered Engineer shall be required on the addition or deletion of items to the import or export list.

Please follow the below steps to request EO extensions to the EPCG authorisation issued to you:

  • Services > EPCG
  • Click on Apply for EO/Block Extension
  • Select whether the application is for a block-wise extension or an extension of the EO Period in the field Application for.
  • Select an authorisation from the list of authorisation given Clubbing

Please follow the below path to apply for clubbing of two or more EPCG authorisations:

  • Services > EPCG
  • Click on Clubbing of EPCG authorisation (ANF – 5C)

Steps to apply for closure of EPCG authorisations or issuance of Post export EPCG duty credit scrips:

  • Services > EPCG
  • Click on Closure of EPCG authorisation (ANF – 5B)

Please follow the below path to apply for closure of EPCG authorisations or issuance of Post export EPCG duty credit scrips:

  • Services > EPCG
  • Click on Closure of EPCG authorisation (ANF – 5B)
  • Choose to apply for redemption/regularization/surrender of an issued authorisation or issuance of Post export credit duty scrips
  • Select an authorisation from the given list of authorisations.

Apply for EPCG / Post export EPCG

Amendment of Fields of EPCG Authorisation

Invalidation/Certificate of Supplies of EPCG Authorisation

Clubbing of EPCG Authorisation

Closure of EPCG / Issuance of Post export Scrip

Installation certificate

Apply for EO / Block Extention

Apply for EPCG Committee

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