Advantages of EPCG Scheme

EPCG Scheme is to facilitate import of capital goods for producing quality goods and services to enhance India’s export competitiveness. Scheme allows import of capital goods for preproduction, production and post-production at Zero customs duty.

Alternatively, the Authorisation holder may also procure Capital Goods from indigenous sources in accordance with provisions of paragraph 5.07 of FTP.

Capital goods for the purpose of the EPCG scheme shall include:

(i) Capital Goods as defined in Chapter 9 including in CKD/SKD condition thereof;

(ii) Computer software systems

(iii) Spares, moulds, dies, jigs, fixtures, tools & refractories for initial lining and spare refractories; and

(iv) catalysts for initial charge plus one subsequent charge.

One of the major advantages is Indigenous Sourcing of Capital Goods and benefits to Domestic Supplier, a person holding an EPCG authorisation may source capital goods from a domestic manufacturer.

Such domestic manufacturer shall be eligible for deemed export benefit under paragraph 7.03 of FTP. Such domestic sourcing shall also be permitted from EOUs and these supplies shall be counted for purpose of fulfilment of positive NFE by said EOU as provided in Para 6.09 (a) of FTP.