Post Export EPCG Duty Credit Scrip(s) – Enrich Services

Before getting to know more about this new Scheme, let us refer to the Scheme, which we all know, i.e., the Export Promotion Capital goods scheme (EPCG). Under the EPCG scheme, one can import Capital goods without payment of whole Customs duties, subject to fulfillment of export obligation (EO) on a later period. This particular EPCG scheme is for exporters confident they can subsequently fulfill export obligations. Otherwise, they must pay back the duties and applicable interest to the Customs authorities.

Those manufacturer exporters who doubt fulfilling the export obligation (EO) under the above-referred EPCG Scheme can think of this new Post Export EPCG Duty credit scrip(s) scheme. In this particular Scheme, one can pay the full payment of applicable duties, taxes, and cess in cash while importing the capital goods and opting for this new Scheme. Subsequently, Basic Customs duty paid on import machinery shall be reimbursed in the form of freely transferable duty credit scrip(s), like MEIS, SEIS, etc., in proportion to the exports made / EO fulfilled.

Indian Government has announced this Post Export EPCG Duty Credit Scrips under FTP 2015-20. Exporters can use the tax advantages a DCS offers to offset their import duties by using the exports as a basis for their exports.

Intrinsically as they are not inconsistent with this Scheme, all provisions of the existing EPCG Scheme shall apply.

Until the export obligation (EO) is fulfilled, the import of capital goods is subject to the Actual User condition.

Export Obligations(EPCG Duty Credit Scrip):

The specific EO shall be 85% of the applicable EO under the EPCG Scheme. The average EO, on the other hand, will remain constant. Duty remissions will be granted in proportion to the EO completed.

How do exporters get access to this opportunity? (EPCG Duty Credit Scrip)

Exporters can easily exercise this option by choosing this scheme option by submitting an ANF5A application to the relevant RA and benefitting from this opportunity.

But, subject to a necessary condition, the Exporter must pay all the applicable duties in cash at the time of import of machinery.

In the meantime, the RA will issue an Authorization declaration.

1. “Not for imports” is on the Authorization’s body.
2. Average EO, if applicable.
3. Specific EO at 85% of the applicable specific EO, calculated as though the imports would receive a full duty-free advantage.
4. EOP, which shall begin on the date the Authorisation is issued.

For getting Duty Credit Scrip(s) issued in proportion to the EO completed within the specified EOP, the Exporter may submit a request in ANF 5 B.

While applying to avail of this benefit, proof of actual duty payments on Capital Goods, nexus, and installation certificate(s) for Capital Goods must be provided only for the first such request, together with documentation demonstrating the fulfillment of the EO and the maintenance of the Average EO.

But after that, unless there have been any changes to the documents or proofs previously submitted, only proof of fulfillment of specific EO (along with proof of maintenance of Average EO) additionally completed concerning specific EO fixed may be submitted.

Following the proportionate EO met, RA shall provide freely transferable duty credit scrip(s).

The necessary amount of paid primary customs duty will be the basis for calculating freely transferable Duty Credit Scrips.

Remember that CG imported under paragraph 5.12 of the FTP can only be disposed of on the last export date for offsetting EO against such CG.

If the Exporter requests a drawback on a re-export of CG deemed faulty or unfit for use following paragraph 5.25 of HBP, no duty will be waived under paragraph 5.12 of FTP.

We hope this article has explained what Post Export EPCG Duty Credit Scrip(s) is and how exporters can benefit from this program. You must now understand where you can get its benefits and the requirements. You are well-versed in the method.

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