EPCG in 1997-2002 Policy - Zero Duty
The notification provides for 'Zero' duty
imports under EPCG scheme when the importer undertakes a higher export
obligation.
Additional duty of 10% is attracted in the
general case. Leather, textiles, agro and hotel industry are exempted.
Notification
History: Original No.
& Date: 29/01.04.97
Amended by
71/16.09.97, 89/12.12.97; 113/16.10.2002; 49/24.04.2002
08/23.04.98:
Spare parts value enhanced to 20 percent of the value of capital goods imported
under the notification.
Sub para (g) of
para 10.2, that is, deemed exports to power, gas, and refinery sector allowed
for retirement of export obligation.
09/23.04.98:
Scheme extended to select export products upto the value of Rs one crore in
accordance with the new Exim Policy.; 33/09.06.98; 42/30.06.98; 22/28.02.99;
60/03.08.98; 62/11.08.98; 66/26.08.98
74/09.10.98
-the word "engineering" inserted;
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; 31/08.03.99; 56/11.05.99; 80/25.06.99; 92/15.07.99;
121/04.11.99.; 20/01.03.2000; 52/28.04.2000
Customs Notification text
Ntfn 29 In exercise of the powers 0 See proviso 0
01.04.97 conferred by sub-section
(1) proviso 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 specified in the Table annexed hereto from whole of the duty of customs
leviable thereon which is specified in the First Schedule to the Customs Tariff
Act, 1975 (51 of 1975) and from so much of the additional duty leviable thereon
under section 3 of the said Customs Tariff Act, as is in excess of the amount
calculated at the rate of 10% of the value of goods:
Provided
that where the said goods are required for -
(i)
the manufacture of leather garments, textile garments (including knitwears),
agro products and products of horticulture, floriculture, poultry and bio-tech
products, marine products and software; or
(ii) rendering services by hotel industry and tourism
industry, such goods shall be exempt from the whole of the additional duty
leviable thereon under section 3 of the said Customs Tariff Act.
[Proviso substituted by 62/11.08.98 with the insertion
of hotel industry for additional duty exemption.]
2. The exemption contained in paragraph 1, shall be 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 permitting import of goods free of duty 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 six times the CIF value of the goods imported on FOB
basis, or five times of the CIF value on Net Foreign Exchange basis as
specified in the licence, or for such higher sum as may be fixed by the
Licensing Authority, within a period of eight years from the date of issue of
licence in the following proportions:-
|
SNo. |
Period from the date of issue of
licence |
Proportion of total export
obligation |
|
1. |
Block
of 1st and 2nd year |
Nil |
|
2. |
Block
of 3rd and 4th year |
15% |
|
3. |
Block
of 5th and 6th year |
35% |
|
4. |
Block
of 7th and 8th year |
50% |
Provided further that export obligation of a particular
block may be set-off by the excess exports made in the preceding block(s).
Provided that where the CIF value of
licence is not less than Rs.100 crores, the export obligation shall be
fulfilled within a period of 12 years from the date of issue of licence in the
following proportions, namely: -
|
SNo. |
Period
from the date of issue of Licence |
Proportion
of Total Export Obligation |
|
(1) |
(2) |
(3) |
|
1. |
Block
of 1st, 2nd, 3rd, 4th and 5th Year |
Nil |
|
2. |
Block of 6th 7th and 8th Year |
15% |
|
3. |
Block of 9th and 10th Year |
35% |
|
4. |
Block of 11th and 12th Year |
50%: |
Provided further that export obligation of a particular
block may be set off by the excess export made in the said preceding block(s):
Provided also that.”; [Amended by
49/24.04.2002]
(a)
with an obligation to export products of electronics, food processings,
garments, leather, sport goods, gem & jewellery, agriculture, animal husbandry,
floriculture, horticulture, Pisciculture, Viticulture, Poultry, Sericulture,
bio-tech, engineering, textile and chemical sectors, or [The words
"textile and chemical" inserted by Customs Notification No.
121/4.11.99]
(b)
the export obligation shall be required to be discharged in six years from the
date of issue of licence and the proportions of total export obligation for the
block of 1st and 2nd year, 3rd and 4th year and 5th and 6th year shall respectively
be 15%, 35% & 50%.
Provided
also that in case of licence of CIF value of Rs. ten lakhs or more but less
than twenty crores, where the licence is issued with an obligation to export
products of software sector, the export obligation shall be required to be
discharged in six years from the date of issue of licence and the proportion of
total export obligation for the block of 1st and 2nd years, 3rd and 4th years,
and 5th and 6th year respectively be 15%, 35% and 50%. [Substituted by
09/23.04.98; amended by Ntfn 121/ 04.11.99]
3.
The importer produces within 30 days from the expiry of each block of two years
from the date of issue of licence 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 the export obligation of any particular block of two years
is not fulfilled in terms of the preceding condition, the importer shall within
three months from the expiry of the said block pay duties of customs of an
equal amount equal to that portion of duties 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. [Amended by 113/16.10.02]
4.
The importer shall, if he fails to discharge a minimum 25% of the export
obligation prescribed for any particular block of two years for two consecutive
blocks, be liable to pay forthwith, the whole of the duties of customs leviable
on the goods imported but for the exemption contained in this notification
together with interest at the rate of 15% per annum from the date of
clearance of the goods. [Amended by 113/16.10.02]
5.
The importer shall, if he fails to import goods, including the spares permitted
for import during the entire period of export obligation, for a minimum value
of twenty crores of rupees within two years from the date of issue of the
licence or within such extended period as the licensing authority may allow, be
liable to pay forthwith the whole of the duties of customs leviable on the
goods imported but for exemption contained in this notification together with
interest at the rate of 24% per annum from the date of clearance of the goods;
Provided
that in case of licences issued
(a)
with an obligation to export products of electronics, food processing,
garments, leather, sport goods, gem and jewellery, agriculture, acquaculture,
animal husbandry, floriculture, horticulture, pisciculture, viticulture,
poultry, sericulture, bio-tech and engineering, textile and chemical sectors,
or [The words "textile and chemical" inserted by Customs Notification
No. 121/4.11.99]
(b)
the minimum value together with the value of the spares specified in the Table
annexed hereto shall be rupees one Crore.
Provided
further that in case of licences issued with an obligation to export products
of software sector, the minimum value together with the value of the spares
specified in the Table annexed hereto shall be rupees ten lakhs.
Provided
also that the aforesaid conditions of minimum value of import which is rupees
twenty crores, or rupees one crore, or rupee ten lakhs, as the case may be,
shall be deemed to have been complied with where the shortfall in import is
within 10% of the limits so prescribed.
[The
third proviso substituted by 33/09.06.98]
6.
The capital goods imported, assembled of 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 agri-culture
products, and
(iii) imported
rendering services,-
the capital
goods may be installed at the factory/premises of such other persons 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 and 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]
7. Notwithstanding anything contained in conditions (3)
and (4), where the Licensing Authority grants extension of block wise period
for any block(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% of such export obligation, the said block 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:
Provided that in respect of licence of CIF value not less
than Rs.100crores, extension of overall period of export obligation shall not
be allowed. [Substituted by 49/24.04.02]
3. Where the goods are found defective
or unfit for use, the said goods 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].
|
Table |
|
|
SNo. |
Description of
goods |
|
(1) |
(2) |
|
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, -
‘(1) “Capital Goods"
means,
(i) 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, marine, aquaculture,
animal husbandry, floriculture, horticulture, pisciculture, poultry,
viticulture and sericulture; and
(c) in the case of hotel industry and tourism industry,
plant, machinery, equipment and accessories required from rendering services,
specified in the Annexure I; and
(d) in the case of marine products, plant, machinery,
equipment and accessories, specified in Annexure II;
(e) manufacture of textile products, which are specified
in Annexure III, and
(f) manufacture of chemical products, namely dye and dye
intermediates and drug and drug intermediates, which are specified in Annexure
IV;
[Explanation (1) substituted by 60/03.08.98; Sl. No.
(b) and (c) amended by Ntfn 121/04.11.99; Sl. No. (e) and (f) inserted by Ntfn
121/04.11.99]
(2) “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, 1/1992-2002 dated the 31st
March 1997
(3) “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;
‘(4) “export obligation”,-
(i) in relation to importers other than hotel industry
and tourism industry 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; and
(ii) in relation to hotel industry and tourism industry
rendering services, means receiving payments in freely convertible foreign
currency for services rendered through the use of such capital goods; [Clause
(4) substituted by 60/03.08.98]
(iii) 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
4(iii) inserted by 29/28.01.2004]
(5) “Net foreign exchange”, in relation to
importers other than hotel industry and tourism industry, means FOB value of
products exported in discharge or obligation in terms of this notification
minus CIF value of inputs used in manufacture thereof where such inputs have
been-
(a) imported by the importer directly against a licence
or
(b) procured indigenously, for which the importer claims
replenishment under the Duty Exemption Scheme as contained in Chapter 7 of the
Export and Import Policy.
[Clause (5) substituted by 60/03.08.98]
(6) “product”, for the purpose of engineering
sector, means,-
(a) machine tools,
parts and accessories thereof,
(b) automotive
components and accessories,
(c) bicycle parts and
accessories,
(d) hand tools,
cutting tools and small tools,
(e) castings and
forgings (ferrous and non-ferrous), all sorts,
(f) pumps, electric
motors and parts thereof,
(g) fastners, all
types (ferrous and non-ferrous),
(h) bright bars and
shafting,
(i) scientific and
surgical instruments.
[Clause (6) inserted by 74/09.10.98]
(7) “tourism industry” means, hotels, travel
agents, tour operators or tourist transport operators, who are certified as
Export House or Trading House or Star Trading House or Super Star Trading House
in terms of notification of the Government of India in the Ministry of
Commerce, No.33 (RE-98) 1997-2002 dated the 26th November, 1998; [Sl. No. 7
inserted by 31/08.03.99]
Annexure – I
[See clause (i) of
the explanation]
A. Food and Beverges Equipment (other than
Household type)
[Copy
Available with ABS]