An Advantageous Scheme for Procurement of Capital Goods
- The import of capital goods (including CKD/SKD thereof as well as computer software systems and spares, jigs, fixtures, dies and moulds) at 0%/3.09% is allowed by the EPCG scheme. Customs duty as against the normal total of 23.895%/20.805%, thus providing a duty saved value of more than 20% of the import value. This is subject to an Export Obligation (EO) comparable to 6/8 times of duty conserved, to be accomplished over a period of 6/8 years reckoned from the date of issuance of license. For bigger projects, SSI etc. there are additional relaxed norms of EO.
- The scheme covers manufacturer exporters with or without supporting manufacturer(s) / vendor(s), merchant exporters tied to supporting manufacturer(s) and Service Providers.
- ACTUAL USER CONDITIONS: Until the export obligation is completed, import of capital goods is subject to Actual User Condition.
- EXPORT OBLIGATION: The export of goods competent of being manufactured or produced by employing of the capital goods imported under the scheme requires to be fulfilled for the export obligation. In addition upto 50% of the EO can also be fulfilled by any alternate product of the company or even Group Company. Deemed Exports like supplies to Power Projects, Projects funded by WB/ADB/JBIC etc, EOUs etc. can also be utilized to fulfill the EO.
- INDIGENOUS SOURCING: A person holding an EPCG license may source the capital goods from a domestic manufacturer in spite of importing them. The domestic manufacturer supplying capital goods to EPCG license holders shall be eligible for refund of Excise Duty paid by him. In addition the indigenous supplier can import his own raw material duty free and other benefits which can be discussed.