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What is Export Promotion Capital Goods (EPCG) Scheme
The objective of the Export Promotion Capital Goods (EPCG) Scheme is to facilitate import of capital goods for producing quality goods and services and enhance India’s manufacturing competitiveness. EPCG Scheme allows import of capital goods for pre-production, production and post-production at zero customs duty. Capital goods imported under EPCG for physical exports are also exempt from IGST and Compensation Cess up to 31.03.2020. Alternatively, the exporter may also procure Capital Goods from domestic market in accordance with provisions of paragraph 5.07 of FTP. 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, moulds, dies, jigs, fixtures, tools & refractories
- Catalysts for initial charge plus one subsequent charge
EPCG scheme covers manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers.
Pre-Requisites for Applying for EPCG Scheme
To apply for an EPCG scheme, an IEC is required. Other pre-requisites as mentioned in the Chapter 5 of Foreign Trade Policy and Hand book of Procedures may be referred.