EPCG in 1997-2002 Policy – 10% Duty
A notification was issued on 01 April, 1997
in the light of new Exim Policy 1997-2002 for EPCG Scheme and Advance Licence.
Essentially the duty on EPCG import has been reduced to 10 percent from 15
percent.
Ntfn 28 In exercise of the powers 10 0 10
01.04.97 conferred by sub-section
(1) of section 25 of
the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied
that it is necessary in the public interest so to do, hereby exempts goods as
specified in the Table annexed hereto from so much of the duty of customs
leviable thereon which is specified in the First Schedule to the Customs Tariff
Act, 1975 (51 of 1975) as is in excess of the amount calculated at the rate of 10%
ad valorem and from whole of the additional duty leviable thereon
under section 3 of the said Customs Tariff Act, subject to the following
conditions, namely:-
(1)
The goods imported are covered by a valid licence issued under the Export
Promotion Capital Goods (E.P.C.G.) Scheme in terms of Export and Import Policy
(hereinafter referred to as the said policy) permitting import on payment of
duty of customs at the rate of 10% and the said licence is produced for debit
by the proper officer of the customs at the time of clearance:
Provided
that for the import of spare parts, the validity period of the licence shall be
deemed to be the period permitted for fulfillment of the export obligation in
full.
(2) The importer executes a bond in
such form and for such sum and with such surety or security as may be specified
by the Assistant Commissioner of Customs binding himself to fulfill export
obligation equivalent to four times the CIF value of the goods imported or for
such higher sum as may be fixed by the Licensing Authority within a period of five
years from the date of issue of the said licence in the following proportions:-
|
SNo. |
Period from the date of issue of
licence |
Proportion of total export
obligation |
|
1. |
1st Year |
Nil |
|
2. |
2nd Year |
10% |
|
3. |
3rd Year |
20% |
|
4. |
4th Year |
30% |
|
5. |
5th Year |
40% |
"Provided that where a sick unit
notified by the Board for Industrial and Financial Reconstruction is
subsequently taken over by another unit for revival, the export obligation may
be fulfilled within a period of 12 year from the date of issue of said licence,
[Amended by 14/21.01.03]
Provided further that export obligation of a particular
year may be set off by the excess exports made in the preceding years.
(3) The importer produce within thirty days of the expiry
of each year from the date of issue of licence from 2nd year or within such
extended period as the Assistant Commissioner of Customs may allow, evidence to
the satisfaction of the Assistant Commissioner of Customs showing the extent of
export obligation fulfilled, and where export obligation of any particular year
is not fulfilled in terms of the preceding condition, the importer shall within
three months from the expiry of the said year pay an amount equal to that
portion of the duty leviable on the goods but for the exemption contained
herein which bears the same proportion as the unfulfilled portion of the export
obligation bears to the total export obligation together with interest at the
rate of 15% per annum from the date of clearance of the goods.
(4) The importer shall, if he fails to discharge a
minimum of 25% of the export obligation prescribed for any particular year, for
three consecutive years, be liable to pay forthwith the whole of the duty of
customs leviable on the goods imported but for the exemption contain in this
notification together with interest at the rate of 15% per annum from
the date of clearance of the goods; [Amended by 113/16.10.2002]
(5) The capital goods imported, assembled or manufactured
are installed in the importer’s factory or premises and a certificate from the
jurisdictional Assistant Commissioner of Central Excise or independent
Chartered Engineer, as the case may be, is produced confirming installation and
use of capital goods in the importer’s factory or premises, within six months
from the date of completion of imports or within such extended period as the
said Assistant Commissioner of Customs may allow. [Substituted by
42/30.06.98]
Provided that in case of -
(i) manufacturer
exporter and merchant exporter having supporting manufacturer(s)/vendor(s),
(ii) import of
irrigation equipment for use in contract farming for export of agriculture
products, and
(iii) importer
rendering services,
the capital
goods may be installed at the factory/premises of such other person whose name
and address are endorsed on the license referred to in condition
(1) and where
the bond for full difference of duty, if necessary, in terms of condition
(2) with a bank
guarantee is executed by the importer and such other person binding themselves
jointly or severally to fulfill the export obligation and all other conditions
of this notification and to pay duty with interest in case of default; [Amended
by 52/28.04.2000].
Provided further that in case of importers rendering
services not required to be registered with Central Excise authorities, a
certificate from independent Chartered Engineer confirming the installation and
use of capital goods in the importer’s premises may be produced.
(6) Notwithstanding anything contained in conditions (3)
and (4), where the Licensing Authority grants extension of year-wise
period for any year(s) or overall period of fulfilment of export
obligation upto a period of two years or regularisation of shortfall in
export obligation not exceeding 5 per cent of such export obligation, the said
year-wise period or overall period of export obligation may be extended and the
said shortfall in export obligation be condoned by the Assistant Commissioner
of Customs or Deputy Commissioner of Customs. [Substituted by
49/24.04.2002]
"Provided that inrespect of licence having overall
export obligation period of 12 year, further extension of overall export
obligation period shall not be allowed." [Amended by 14/21.01.03]
Provided that extension of year wise period of export
obligation shall not be allowed more than once and more than a period of one
year with a period of five years.
2. Where the goods are found defective or unfit for use, the
said good may be re-exported back to the foreign supplier within 3 years from
the date of payment of duty on the importation thereof.
Provided
that at the time of re-export the goods are identified to the satisfaction of
the Assistant Commissioner of Customs or Deputy Commissioner of Customs as the
goods which were imported. [Inserted by 52/28.04.2000]
|
SNo. |
Description of goods |
|
1. |
Capital goods. |
|
2. |
Capital goods in
SKD/CKD condition to be assembled into capital goods by the importer. |
|
3. |
Components of
capital goods required for assembly or manufacture of capital goods by the
importer. |
|
4. |
Spare parts |
Explanation: - In this notification,-
(i)
“Capital goods” means any plant, machinery, equipment and accessories
required for-
(a)
manufacture or production of other goods, including packaging machinery and
equipments refractories, refrigeration equipment, power generating sets,
machine tools, catalysts for initial charge, and equipment and instruments for
testing, research and development, quality and pollution control;
(b)
use in manufacturing, mining, agriculture, aquaculture, animal husbandry,
floriculture, horticulture, pisciculture, poultry viticulture and sericulture;
(c)
rendering services;
(ii)
“Export and Import Policy” means the Export and Import Policy April,
1997 - March, 2002 published vide notification of the Government of India in
the Ministry of Commerce No.1/1997-2002, dated the 31st March, 1997.
(iii)
“Licensing Authority” means the Director General, Foreign Trade
appointed under section 6 of the Foreign Trade (Development and Regulation)
Act, 1992 (22 of 1992) or an officer authorised by him to grant a licence under
the said Act;
(iv)
“export obligation”-
(a) in
relation to importers other than those rendering services, means export to a
place outside India of products manufactured with the use of capital goods
imported, assembled or manufactured in terms of this notification or making of
supplies of such products in terms of clauses (a), (b) (d), (e), (f) and
(g) of paragraph 10.2 of the Export and Import Policy;
(b) in
relation to importers rendering services, means receiving payments in freely
convertible foreign currency for services rendered through the use of such
capital goods; and
(c)
means, export of goods in terms of the notification of the Government of India
in the Ministry of Commerce and Industry (Department of Commerce) No 28
(RE-2003)/2002-2007 dated 28th January 2004. [Sub-clause (iv)(c) inserted by
29/28.01.2004]
Notification
History: Original No/date: 28/01.04.97
Amended
by 08/23.04.98. Spare parts at Sl no 4 of table upto 20 percent of the value of
capital goods at Sl no 1-3 in the table allowed.; 33/09.06.98; 42/30.06.98;
14/21.1.03;113/16.10.02; 49/24.4.02; 14/21.1.03;
75/09.10.98
– Capital goods including jigs, fixture, dies and moulds have been omitted from
the EPCG scheme concessional duty notifications. The concession is applicable
only on spares import; 56/11.05.99; 52/28.04.2000; 29/28.01.2004