Page 262 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 12: Export Incentives Schemes

5. Excisable goods cannot be removed from the place of manufacture unless prescribed Notes
......................... has been paid

6. .......................... in India are exempt from the payment of excise duties.
7. Normally, the goods, for which the bond is executed, must be exported within a period of
.................... months from the date of excise clearance
8. ................................. is an incentive given to the exporters of different categories of goods.
9. The drawback claims under the ........................... system get automatically settled and the
amount of drawback gets transferred to the drawback account of the exporter.
10. Green Shipping Bill needs to be used by the exporter at the time of shipment, if the item
being exported is eligible for .............................. claim.

12.6 Export Promotion Capital Goods Scheme

The Export Promotion Capital Goods Scheme focuses on less costly imports of capital goods for
the exporters to increase their cost and manufacturing competitiveness in the international
markets. Under the scheme, exporters are allowed to import capital goods at concessional rates
of import duty against acceptance of certain export obligations. The scheme came into force in
1990 and has been revised a number of times to meet the changing needs of the export community.
The scheme permits import of capital goods for pre-production, production and post production
(including CKD/SKD thereof as well as computer software systems) at 5% customs duty subject
to an export obligation equivalent to 8 times of duty saved on capital goods imported under
EPCG scheme to be fulfilled over a period of 8 years reckoned from the date of issuance of
licence. Capital goods are allowed at 0% duty for exports of agricultural products and their
value added variants.
However, in respect of EPCG licences with a duty saved of `100 crore or more, the same export
obligation is allowed to be fulfilled over a period of 12 years.
Capital goods under the scheme include spares (including refurbished/reconditioned spares),
tools, jigs, fixtures, dies and moulds. EPCG licence may also be issued for import of components
of such capital goods required for assembly or manufacturer of capital goods by the licence
holder. Secondhand capital goods without any restriction on age are also allowed to be imported
under the EPCG scheme.
The scheme covers manufacturer exporters with or without supporting manufacturer(s)/
vendor(s), merchant exporters tied to supporting manufacturer(s) and service providers. Import
of capital goods is subject to the Actual User condition till the export obligation is completed.
The export obligation needs to be fulfilled by the export of goods capable of being manufactured
or produced by the use of the capital goods imported under the scheme. The export obligation
under the scheme shall be, in addition to any other export obligation undertaken by the importer,
except the export obligation for the same product under Advance Licence, DFRC, DEPB or
Drawback scheme.
In the case of EPCG licences issued to agro units in the agri export zones, a period of 12 years
reckoned from the date of issue of the licence has been permitted for the fulfilment of export
obligation. The agro units in the agri export zones are also allowed the facility of moving the
capital good(s) imported under the EPCG within the agri export zone.
In the latest Annual Supplement to the FTP 2004-09, released in April 2006, the Finance Minister
has introduced further flexibilities in the conditions relating to maintenance of average export

LOVELY PROFESSIONAL UNIVERSITY 257