The Exports Promotion Capital Goods (EPCG) Scheme was initiated by the government of India to enhance the picture of imports and exports in the country. The prime objective of the EPCG Scheme was to uplift the number of exports from India. The import of capital goods takes place at a zero customs duty.
What is EPCG License Closure?
EPCG License Closure is the process with the help of which the Directorate General of Foreign Trade (DGFT) can keep an eye on all the activities of an exporter related to the export obligation which is assigned to them by the government. This procedure of managing all the tasks is also known as EPCG redemption.
Once an EPCG License holder fulfills Specific EO and Average EO, then he/she can further reach out to the jurisdictional DGFT office to obtain the closure of the EPCG License. From there on, DGFT goes through their file, and if they feel everything that is needed is inserted in the file and all the documents seem right in all aspects they issue the exporter a letter of closure.
There is a fixed procedure that one needs to follow to get an EPCG License closure certificate. The exporter must submit all the export & import documents that are related to the EPCG License to DGFT and then he/she can put in an application for the closure of the EPCG License. The exporter must present the documents as they will play the role of evidence in the whole procedure.
What is the process for Closure of EPCG License?
Firstly, the holder of the EPCG License has to apply for closure to DGFT with all the mandatory documents. The applicant has to put in an application for closure before the culmination of the export obligation that is 6 years. The export obligation can be completed by a third party export, deemed export, direct export.
The candidate must have a crystal clear record of all financial transactions in the form of Shipping Bills, Electronic Bank Realisation Certificate (e-BRC), and many more. These shipping bills will display all details regarding Duty-Free Import Authorization (DFIA), advance authorization and it will also include if any other scheme can be considered as a part of the fulfillment of the export obligation. The free shipping bills cannot be examined under the EPCG Scheme.
What are the basic documents required for redemption of the EPCG License?
In order to obtain the EPCG License closure certificate, there are several documents that the exporter is expected to submit to the DGFT and they are the original EPCG License, e-BRC, Bill of Export/ Shipping Bills, Statement of Average Exports, Installation Certificate, Copy of Invoices along with the necessary declarations and forms, etc.
In the end, if all the documents attached in your file for the EPCG License are found to be correct, then you will be given a closure letter by the respected authorities. This closure letter will be proof that states you have released the export liability.
What is the procedure for release of Bond & Bank Guarantee from Customs?
One cannot get Bond and BG from the customs department until and unless he/she receives the letter of closure from DGFT RA. For getting closure, the applicant must carry the documents such as an original copy of the redemption letter, copies of other documents that were presented to DGFT RA, and a Copy of the Bond. If the authorities feel content with your file, then you will be handed over a letter regarding the cancellation of the Bond and Bank Guarantee.
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