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Foreign Trade Policy 2005

3. Export Promotion Capital Goods Scheme

  1. For providing a thrust to the Agricultural sector, concessional duty imports made by agro units under the EPCG Scheme shall be allowed to fulfill the export obligation over a longer period of time with a reduced export obligation i.e. 6 times the duty saved over a 12 year period instead of the normal window of 8 times the duty saved in 8 years.
  2. To promote capacity expansion and quality up-gradation in the SSI sector, import of capital goods at 5% Customs duty shall now be allowed subject to a fulfillment of an export obligation equivalent to 6 times the duty saved on capital goods imported under the EPCG Scheme over a period of 8 years. (At present the export obligation under the EPCG Scheme is 8 times the duty saved and reducing the export obligation for small manufacturing units to 6 times shall provide an impetus to industries to modernize their plant and machinery which will enhance our overall export competitiveness in the medium term).
  3. To create modern infrastructure in the retail sector, concessional duty benefits under EPCG scheme shall be extended for import of capital goods required by retailers having a minimum covered shopping area of 1000 sq mts . The retailer shall fulfill the export obligation under the Scheme from payments received against counter sales in free foreign exchange through banking channels as per RBI guidelines.
  4. With a view to accelerate exports under the Scheme and to incentivise fast track companies, firms making 75 % or more of the exports under the EPCG Scheme (including average level of exports) in half or less than half the original export obligation period, shall be freed from the balance export obligation.
  5. Payment received in Rupees for the Port Handling services are counted for export obligation discharge under the EPCG Scheme. This facility is now being extended to include minor ports including ICDs and Container Freight Stations (CFS) also. This will enable augmentation of the facilities available at the secondary ports with modern equipment and thereby reduce cargo handling turnaround time and related transaction costs.
  6. The present requirement of submitting an Installation Certificate for machinery imported under EPCG Scheme will now not be required for units which are not registered with Central Excise. In lieu of a Central Excise Certificate, a Chartered Engineer Certificate will now suffice. Firms importing spares under EPCG shall also be required to submit a Chartered Engineer certificate only instead of a certificate from Central Excise authorities.
  7. The facility of clubbing of EPCG licences has been further liberalized and restrictive conditions relating to same licensing year and same products/services have been deleted. Henceforth, all EPCG licences issued under the same Customs Notification can be clubbed. This will considerably reduce paperwork both for the exporter and the licensing authorities and lead to easier monitoring.

Foreign Trade Policy 2005 Back

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