If you are in the import and export business, you must have heard of the term “EPCG.” You probably have been wondering what it means, its benefit, and how you can obtain it. Here, you can learn everything about the EPCG.
What is the EPCG scheme?
The EPCG scheme is a government initiative designed to promote exports by providing incentives and financial assistance to exporters. It offers substantial benefits for businesses engaged in the export sector.
EPCG License Registration Procedure with Customs The procedure to obtain an EPCG license involves several steps. The exporter needs to apply to the Directorate General of Foreign Trade (DGFT) with the required documents. Once approved, the exporter can import capital goods without paying customs duty, subject to fulfilling export obligations within the specified time frame.
What are the benefits of the EPCG scheme?
The Director General of Foreign Trade (DGFT) issued this scheme for exporters as it promotes Export by providing incentives and other financial assistance. The EPCG scheme benefits exporters in several ways:
- The EPCG Scheme offers duty-free imports of products if a requirement of export obligation equivalent to six times the duty savings amount on capital goods is met within six years.
- The EPCG license offers financial assistance to exporters by removing import charges.
- In the event of exporters with shipments under ₹1 crore, compliance requires the production of a bank or bond guarantee. The customs port must provide the bond for exporters with an export above ₹1 crore. But, a bank guarantee is not required.
- Once the exporter obtains the EPCG license, they must register it at the port of entry to be eligible for duty waivers when submitting the Bill of Entry.
- It helps encourage the fast-track enterprise to promote exports.
What is the function of EPCG?
EPCG is a Government Scheme primarily related to machinery, its parts, and other similar products that exporters use to manufacture goods. This scheme covers manufacturer exporters and provides financial assistance to import machinery goods. The main objective of this scheme is to promote the production of quality goods in India and transport them site the country to speed up the growth of the national economy.
Documents required for EPCG license
You will need these documents to obtain the EPCG license including:
- Import Export Code (IEC)
- Pan Card
- Proforma Invoice
- Digital signature
- GST Registration Certificate
- Excise Registration (if registered)
- Registration certificate from Tourism Department
- Registration cum Membership Certificate (RCMC)
- Self-Certified Original Copy of Certificate of Chartered Accountant
- Self-Certified Original Copy of Certificate of Chartered Engineer
Capital goods allowed under the scheme
Under this scheme, an importer can import these machinery goods, including spares, dies, tools, jigs, moulds, and fixtures. Moreover, importers can also import second-hand capital items without considering their age.
Government Benefits for Exporters
The government of India offers various benefits to exporters to support and promote the export industry. These benefits include financial incentives, schemes like the EPCG scheme, and streamlined customs procedures to facilitate exports.
In conclusion, the EPCG scheme plays a crucial role in promoting exports and supporting businesses engaged in international trade. By offering duty-free imports and financial incentives, the scheme contributes to the growth of the Indian economy. If you are considering applying for the EPCG license, make sure to understand and fulfill the export obligations outlined in the scheme.