EPCG Scheme to
Common Service Providers at 3% in FTP 2009-2014
[Customs
Notification No. 100 dated 11th September 2009]
In exercise of the powers 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
specified in the Table annexed hereto, from,-
(i) 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 three percent
ad-valorem, and
(ii) the
whole of the additional duty leviable thereon under
section 3 of the said Customs Tariff Act, when specifically claimed by the
importer.
2. The exemption under this
notification shall be subject to the following conditions, namely:-
(1) that the goods imported are covered
by a valid authorization issued under the Export Promotion Capital Goods (EPCG)
Scheme to Common Service Providers(hereinafter referred to as CSP) designated
by the Director General Of Foreign Trade (hereinafter referred to as DGFT),
Department of Commerce(hereinafter referred to as DOC) or State Industrial
Infrastructural Corporation in Towns Of Export Excellence (hereinafter referred
to as TEE) in terms of Chapter 5 of the Foreign Trade Policy permitting import
of goods at the rate of three percent duty and the said
authorization is produced for debit by the proper officer of customs at the
time of clearance:
Provided that for import of spare parts specified at Sr.No.4 of the said
Table, the validity period of the authorization shall be deemed to be the
period permitted for fulfillment of the export obligation in full ;
(2) that
the authorization issued under the scheme shall have the details of the users
of the said capital goods and the quantum of the Export Obligation(hereinafter
referred to as EO) which each user would fulfil.
(3) that
the goods imported shall not be disposed of or transferred by sale or lease or
any other manner till export obligation is completed.
(4) that the Common Service
provider and each of the specific users shall execute a bond in such form and
for such sum as may be specified by the Deputy Commissioner of Customs or
Assistant Commissioner of Customs and a bank guarantee equivalent to their
portion of duty foregone in terms of export obligation apportioned in the authorization
binding
themselves to fulfil export obligation on Free On Board (FOB)
basis equivalent to eight times the duty saved on the goods imported as may be
specified on the licence or authorization, or for
such higher sum as may be fixed or endorsed by the Licensing Authority or
Regional Authority in terms of Para 5.10 of the Handbook of Procedures Vol I, issued under para 2.4 of the Foreign Trade Policy,
within a period of eight years from the date of issue of licence
or authorization, in the following proportions, namely :-
|
S.No. |
Period from the date of issue
of Authorization |
Proportion of total export
obligation |
|
(1) |
(2) |
(3) |
|
1. |
Block of 1st to 6th year |
50% |
|
2. |
Block of 7th to 8th year |
50% |
Provided that where the duty saved is not less than Rupees one hundred crores, or where the authorization is issued to units in
the agri export zone as may be notified by the licensing authority or Regional
Authority, the export obligation shall be fulfilled within a period of twelve
years from the date of issue of authorization in the following proportions, namely :-
|
S.No. |
Period from the date of issue
of Authorization |
Proportion of total export
obligation |
|
(1) |
(2) |
(3) |
|
1. |
Block of 1st to 10th year |
50% |
|
2. |
Block of 11th to 12th year |
50% |
Provided further that where a sick unit is notified by the Board for
Industrial and Financial Reconstruction(BIFR) or where
a rehabilitation scheme is announced by the concerned State Government in
respect of sick unit for its revival, the export obligation
may be
fulfilled within time period allowed by the Licensing Authority or Regional
Authority as per the rehabilitation package prepared by the operating agency
and approved by BIFR or rehabilitation department of State Government . In
cases where the time period is not specified in the rehabilitation package, the
export obligation may be fulfilled within the time
period allowed by the Licensing Authority or Regional Authority which shall not
exceed twelve years.
Provided also that where the capital goods are imported by agro units
and units in tiny and cottage sector, the export obligation shall be fixed
equivalent to six times the duty saved on the goods imported as may be
specified on the authrization, or for such higher sum
as may be fixed by the licensing authority, within a period of twelve years
from the date of issue of the authorization :
Provided also that where the capital goods are imported for
technological upgradation as per conditions specified
in Para 5.8 of the Foreign Trade Policy or by
small scale industry units as defined in paragraph 5.2 of the Foreign Trade
Policy, as the case may be, the export obligation shall be fixed equivalent to
six times the duty saved on the goods imported as may be specified on the
authorization, or for such higher sum as may be fixed by the Licensing
Authority or Regional Authority, within a period of eight years
from the date of issue of authorization subject to the further condition that
in the case of Small Scale Industry (SSI) units the landed Cost Insurance
Freight (CIF) value of such imported capital goods under the scheme shall not
exceed Rupees fifty lakhs and total investment in plant and machinery after
such imports shall not exceed the SSI limit :
Provided also that spares (including refurbished or reconditioned
spares), moulds, dies, jigs, fixtures, tools, refractory for initial lining and
catalyst for initial charge, for the existing plant and machinery (imported
earlier, under EPCG or otherwise), shall be allowed to be imported under the
EPCG scheme subject to an export obligation equivalent to 50% of the normal
export obligation prescribed above, to be fulfilled in 8 years reckoned from
the date of issue of the Authorization, subject to the condition that the CIF
value of import of the said spares etc. will be limited to 10% of the CIF value
of the plant and machinery imported under the EPCG authorization or 10% of the
book value of the plant and machinery imported earlier otherwise than under
EPCG Scheme, as the case may be.
Provided also that export obligation of a particular block may be set
off against the excess exports made in the said preceding block(s);
(5) that if the authorisation holder does not claim exemption from the
additional duty leviable under section 3 of the
Customs Tariff Act, 1975, the additional duty so paid by him shall not be taken
for computation of the net duty saved for the purpose of fixation of export
obligation provided the Cenvat credit of additional
duty paid has not been taken;
(6) that the Authorization Holder
and the other specific users produce within 30 days from the
expiry of each block from the date of issue of authorization or within such
extended period as the Deputy Commissioner of Customs or Assistant Commissioner
of Customs may allow, evidence to the satisfaction of the Deputy Commissioner
of Customs or Assistant Commissioner of Customs showing the extent of export
obligation fulfilled, and where the export obligation of any particular block
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 equal to
an amount which bears the same proportion to the duties leviable
on the goods, but for the exemption contained herein, which 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;
(7) where the Authorization
Holder fulfills 75% or more of the export obligation as specified in condition
(4)
(over and
above 100% of the average export obligation) within half of the period
specified for export obligation as mentioned in condition (4),
his
balance export obligation shall be condoned and he shall be treated to have fulfilled
the entire export obligation;
(8) that the
capital goods imported, assembled or manufactured are installed in the Common
Service Provider’s factory or premises and a certificate from the
jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner
of Central Excise, as the case may be, is produced
confirming installation and use of capital goods in the Common Service
Provider’s factory or premises, within six months from the date of completion
of imports or within such extended period as the Deputy Commissioner of Customs
or Assistant Commissioner of Customs, as the case may be, may allow :
Provided that in case of import of spares, the installation certificate
shall be produced within three years from the date of import
:
Provided further that if the Authorization Holder
is not registered with central excise or if he is a service provider, as the
case may be, he may produce the said certificate of installation and usage
issued by an independent Chartered Engineer :
Provided also that agro units located in Agri Export Zones or service
providers in Agri export Zones may move the capital goods within the Agri
Export Zones under intimation to the jurisdictional Deputy Commissioner of
Central Excise or Assistant Commissioner of Central Excise, as the case may be,
subject to the condition that the importer shall maintain accurate record of
such movement;
(9) that the
imports and exports are undertaken through sea ports at Bedi
(including Rozi-Jamnagar), Chennai, Cochin, Dahej, Dharamtar,Haldia (Haldia Dock complex of Kolkata port) Kakinada, Kandla,
Kolkata, Krishnapatnam, Magdalla,
Mangalore, Marmagoa, Muldwarka,
Mumbai, Mundhra,Nagapattinam, Nhava
Sheva, Okha, Paradeep, Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam and Vadinar
or through any of the airports at Ahmedabad, Bangalore, Bhubaneswar, Chennai,
Cochin, Coimbatore, Dabolim (Goa), Delhi, Hyderabad,
Indore, Jaipur, Kolkata, Lucknow (Amausi), Mumbai,
Nagpur, Rajasansi (Amritsar), Srinagar, Trivandrum
and Varanasi or through any of the Inland Container Depots at Agra, Ahmedabad, Anaparthy (Andhra Pradesh), Babarpur,
Bangalore, Bhadohi, Bhatinda,
Bhilwara, Bhiwadi, Bhusawal, Chheharata (Amritsar),
Coimbatore, Dadri, Dappar (Dera Bassi), Daulatabad
(Wanjarwadi and Maliwada),
Delhi, Dighi (Pune),
Durgapur (Export Promotion Industrial Park), Faridabad, Garhi
Harsaru, Gauhati, Guntur,
Hyderabad, Jaipur, Jallandhar, Jamshedpur, Jodhpur,
Kanpur, Karur, Kota, Kundli,
Loni (District Ghaziabad), Ludhiana, Madurai, Malanpur, Mandideep (District Raisen), Miraj, Moradabad,
Nagpur, Nasik, Pimpri (Pune),
Pitampur (Indore), Pondicherry, Raipur, Rewari, Rudrapur(Nainital), Salem, Singanalur, Surat, Surajpur, Tirupur, Tuticorin, Udaipur, Vadodara, Varanasi, , Waluj
(Aurangabad) or through the Land Customs Station at Agartala,
Amritsar Rail Cargo, Attari Road, Changrabandha,
Dawki, Ghojadanga, Hilli, Jogbani, Mahadipur, Nepalganj Road, Nautanva (Sonauli), Petrapole, Ranaghat, Raxaul, Singhabad and Sutarkhandi or a Special Economic Zone notified under
section 4 of the Special Economic Zones Act, 2005 (28 of 2005):
Provided that the Commissioner of Customs may, by special order or a
public notice and subject to such conditions as may be specified by him, permit
import and export through any other sea-port, airport, inland
container depot or through a land customs station within his jurisdiction.
(10) notwithstanding anything
contained in condition (6) above, where the Licensing
Authority or Regional 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
regularization of shortfall in export obligation, not exceeding five percent of
such export obligation, the said block-wise period or overall period of export
obligation shall be extended or condoned by the Deputy Commissioner of Customs
or Assistant Commissioner of Customs, as the case may be :
Provided that in respect of sick units referred to in the second proviso
to condition (4) extension of overall period of
export obligation shall not be allowed :
Provided further that the Regional Authority may grant further extension
in the overall period of export obligation upto a
period of further two years if the authorization holder pays fifty percent of
duty payable in proportion to the unfulfilled portion of export obligation and
agrees to fulfill other conditions as may be specified by the Regional
Authority for this purpose;
Provided further that the Export Obligation period
shall not be extended beyond 12 years including the original Export Obligation
period of 8 years or 12 years as the case may be.
3. Where the goods specified in
the said Table are found defective or unfit for use, the said goods may be
re-exported back to the foreign supplier within three 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 Deputy Commissioner of Customs or Assistant Commissioner of
Customs, as the case may be, to be the same as the goods which were imported.
Explanation – For the purpose of this notification,-
1. “Capital goods” has the same
meaning as assigned to it in Paragraph 9.12 of the Foreign Trade Policy;
2. “Common Service Provider
(CSP)” means a service provider who is designated or certified as a Common
Service Provider by the DGFT, Department of Commerce or State Industrial
Infrastructural Corporation in a Town of Export Excellence.
3. “Export obligation”, -
(1) means
obligation on the Common Service provider and each of the specific users to
export to a place outside India, goods manufactured or capable of being
manufactured or services rendered by the use of capital goods imported in terms
of this notification. The export obligation shall be over and above the average
level of exports achieved by the Common Service provider or the specific user
in the
preceding three licensing years for the same and similar products within the
overall export obligation period including the extended period, if any. Such
average shall be the arithmetic mean of export performance in the last 3 years
for the same and similar products.
Provided that upto 50% of the export
obligation may also be fulfilled by export of other good(s) manufactured or
service(s) provided by the Common Service provider / the specific user or his
group company or managed hotel, which has the EPCG authorization subject to the
condition that in such cases, additional export obligation imposed shall be
over and above the average exports achieved by the Common Service provider /
the specific user or his group company or managed hotel in preceding three
years for both the original and the substitute product(s) or service(s) :
Provided further that in case of export of goods relating to handicraft,
handlooms, cottage, tiny sector, agriculture, animal husbandry, floriculture,
horticulture, pisciculture, viticulture, poultry and
sericulture, the Common Service provider or the specific user shall not be
required to maintain the average level of exports :
Provided further that in case of export of goods
relating to aquaculture(including fisheries), the Common Service provider or
the specific user shall not be required to maintain the average level of
exports subject to the condition that EPCG authorization has been obtained for
goods other than fishing trawlers, boats, ships and other similar items.
Provided also that the goods, excepting tools, imported under this
notification by the aforesaid sectors, shall not be allowed to be transferred
for a period of five years from the date of imports even in cases where export
obligation has been fulfilled. Transfer of capital goods would, however, be
permitted within the group companies, after fulfillment of export obligation
but before five years from the date of imports, under intimation to Regional
Authority and jurisdictional Central Excise Authority :
Provided also that exports made to former USSR, or to such countries as
notified by Director General of Foreign Trade as on 31.3.08, shall not be
counted for fixing the average level of exports :
Provided also that exports against only such shipping bills which
mention the EPCG authorization No. and date shall be counted for the discharge
of the export obligation;
Provided also that exports counted against the authorization issued
under this notification shall not be counted towards fulfilment
of other specific Export Obligations against other EPCG authorizations;
(2) shall
be fulfilled through physical exports and the export proceeds shall be realized
in freely convertible currency. However the following categories of supplies, shall also be counted towards fulfillment of
export obligation:
(a) deemed
exports, namely:
(i) supply of goods against Advance
Authorization/Advance Authorization for Annual Requirement/ Duty Free Import
Authorization (DFIA);
(ii) supply
of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or
Electronics Hardware Technology Parks (EHTPs) or Bio-Technology Parks (BTPs);
(iii) supply of goods to projects
financed by multilateral or bilateral agencies or Funds as notified by
Department of Economic Affairs (DEA), Ministry of Finance (MOF) under
International Competitive Bidding (ICB) in accordance with procedures of those
agencies or Funds, where legal agreements provide for tender evaluation without
including customs duty; supply and installation of goods and equipments (single
responsibility of turnkey contracts) to projects financed by multilateral or
bilateral agencies or Funds as notified by DEA, MOF under ICB, in accordance
with procedures of those agencies/Funds, where bids may have been invited and
evaluated on the basis of Delivery Duty Paid (DDP) prices for goods
manufactured abroad;
(iv) supply
of goods to any project or purpose in respect of which the Ministry of Finance,
by a notification, permits import of such goods at zero customs duty and the
supply is made under ICB procedure;
(v) supply
of goods to power projects and refineries not covered in (iv) above under ICB
procedure;
(vi) Supply of goods
to nuclear power projects through competitive bidding as opposed to ICB;
(b) Supply of ITA-1 items to
Domestic Tariff Area, provided realization is in free foreign exchange;
(c) Royalty payments received in
freely convertible currency and foreign exchange received for Research and
Development (R and D) services; and
(d) Payments received in rupee
terms for port handling services in terms of chapter 9 of the Foreign Trade
Policy.
4. “Foreign
Trade Policy” means the Foreign Trade Policy 2009-2014 published in the gazette
of India, Part II, Section 3, Sub-section (ii) vide notification of the
Government of India in the Ministry of Commerce and Industry, No.1/2009-2014
dated the 27th August, 2009 as amended from time to time;
5. “Licensing Authority or
Regional Authority” means the Director General of Foreign Trade appointed under
section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of
1992) or an officer authorized by him to grant an authorization under the said
Act;
6. “Manufacture” has the same
meaning as defined in clause (f) of section 2 of the Central Excise Act, 1944
(1 of 1944).
7. “Towns of Export Excellence(TEE)” means a selected town producing goods of
Rs.750 Crores or more based on potential for growth
in exports. However for TEE in Handloom, Handicraft, Agriculture and fisheries
sector the threshold limit would be Rs.150 Crores.
|
Table |
|
|
S.No. |
Description of goods |
|
(1) |
(2) |
|
1. |
Capital goods for
pre-production, production and post production including second hand capital
goods.
|
|
2. |
Capital goods in Semi Knocked
Down (SKD) / Completely Knocked Down (CKD) conditions to be assembled into
capital goods by the importer. |
|
3. |
Spare parts of CIF value upto 10% of the CIF value of goods specified at Serial
Nos.1 and 2 as actually imported and required for maintenance of capital
goods so imported, assembled, or manufactured. |
|
4. |
Spare parts of CIF value upto 10% of the book value of the existing plant and
machinery of the authorization holder. |
[F. No.605/58/2009-DBK]