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Compliance and Post-Issuance Requirements

Learn about the EPCG Scheme's compliance and post-issuance requirements, including export obligation, record maintenance, EO monitoring, and consequences of non-compliance.<br>

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Compliance and Post-Issuance Requirements

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  1. dgftguru.com

  2. Compliance and Post-Issuance Requirements Requirements Learn about the EPCG Scheme's compliance and post-issuance requirements, including export obligation, record maintenance, EO monitoring, and consequences of non- compliance. EPCG Scheme Compliance and Post-Issuance dgftguru.com The Export Promotion Capital Goods (EPCG) Scheme is a key initiative under India’s Foreign Trade Policy (FTP) designed to facilitate the import of capital goods for producing export products. While the scheme offers significant benefits, including customs duty exemptions, it comes with specific compliance and post- issuance requirements that businesses must adhere to for successful implementation.

  3. dgftguru.com COMPLIANCE REQUIREMENTS Export Obligation (EO) Fulfilment of Export Obligation: Beneficiaries must fulfil the export obligation, equivalent to six times the duty saved, within six years from the issue of the EPCG authorization. Annual Progress Reporting: Exporters must report the annual progress of the EO fulfilment to the Directorate General of Foreign Trade (DGFT). Maintenance of Records Maintain records of all imports under the EPCG Scheme, including details of capital goods, customs duty saved, and export performance. Records should be preserved for at least three years from the EO completion date. Installation Certificate Submit an installation certificate from a Chartered Engineer to the DGFT within six months of the import, certifying that the imported capital goods are operational and used for the intended production process.

  4. dgftguru.com POST-ISSUANCE REQUIREMENTS Monitoring of EO Fulfillment Exporters are required to regularly monitor the fulfilment of their EO. Non-compliance may lead to payment of the saved duty with interest or penalties. Extension of EO Period If an exporter cannot meet the EO within the specified timeframe, they may apply for an extension by providing valid reasons and paying additional fees. Redemption and Discharge of Authorization Upon fulfilling the EO, exporters must apply for redemption of the EPCG authorization. Submit proof of exports, such as shipping bills, invoices, and payment records, to DGFT for discharge of the EO.

  5. CONSEQUENCES OF NON-COMPLIANCE dgftguru.com Failure to comply with the EPCG Scheme’s terms can result in penalties, including payment of duty saved along with interest. This can affect the eligibility for future EPCG authorizations and other government benefits. CONCLUSION The EPCG Scheme provides exporters with an excellent opportunity to reduce production costs and compete in global markets. However, adherence to compliance and post-issuance requirements is crucial to avoid penalties and ensure smooth operations. By understanding and meeting these obligations, businesses can maximize the benefits of the EPCG Scheme and contribute to India’s export growth. This detailed overview can form a clear and engaging presentation to highlight the EPCG Scheme’s compliance and post-issuance obligations effectively.

  6. dgftguru.com THANKYOU CONTACT Phone Number +91-9899399331 Website www.dgftguru.com Email mehul@dgftguru.com 38, Hanuman Road, Connaught Place, New Delhi - 110001. Address

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