EPCG Scheme

EPCG [Export Promotion Capital Goods Scheme]

Common Bond: 
      • To be executed at port of registration of first Authorisation in FY: Financial Yearwise at CHs where ECES 1.5.implemented. 
      • Undertaking that authoriztion is not registered elsewhere is to be given
      • When bond value exhausted, topping up on payment of stamp duty applicable to new bond - through crossed stamp paper.
      • Where Bank Guarantee required, may be furnished as and when the goods are imported and the benefits of concessional duties availed.
      • AO at port of import shall independely arrive at the quantum of BG
      • BG shall be furnished by the authorization holder only at the port where the common bond has been executed, the Customs authorities there shall monitor to keep it alive

Bond Amount:   

  • To cover only the duty ordinarily leviable on the goods but for the exemption.
  • Similar analogy will apply for quantification of the BG amount. CBEC Circular 4/2009-Cus. dt. 28.1.2009
  • Bond should include a condition that the interest and other charges will be paid by the authorization holder in case of non compliance of the conditions of the notification.
Bank Guarantee:   
  • Nil – Exporters with turnover of Rs.5 crores having good track record for 3 years, PSU, Star Export House, Manufacturer Exporters/Service provides registered with C.Ex./Service Tax authorities, exporting for 2 financial years with Rs.1 crore export in preceding FY.
  • 15% Manufacturer Exporters not covered above, Agri Export Zones, Established Service provides who havea free FE earnings of Rs.50 during preceding FY with clean track record.
  • 25% Service providers in port handling sector appointed as custodians by Customs/CE authorities import of capital goods under EPCG scheme only.
  • 100% - others.  CBEC Circular 17/2009-Cus dt 25.5.2009
  • Exemption from Bank Guarantee - Authorization holder to furnish an affidavit regarding any case booked against him during previous three FYs. Random cross-check by Commr.of Customs field formation. Cir.6/2011 Cus dt 18.1.2011
Form of Bond: 

In respect of Zero duty EPCG scheme, Condition 1 of the bond in the form to read “I/We, the obligor(s) fulfil all the conditions of the Notification Nos. 101/09-Cus., and 102/09-Cus. both dated 11.9.09 and shall observe and comply with all its terms and conditions.” CBEC Cir.11(A)/2011 Cus dt 28.2.2011

  • Authorization Number to be indicated against each item in BE. 
  • IEC of importer, IEC of the Bond-holder and IEC of Authorization holder to be same.
  • Customs Authorities of port of registration of commond bond to initiate action on default of EO including denial of benefit of BG exemption for future imports.
  • Authorization for annual requirement may not indicate capital goods which can be imported but shall indicate export product(s). Nexus Certificate [CEC] to be submitted to customs. [Nofn No.92/2010-Cus.dt.10.9.10.]
  • Zero duty scheme extended upto 31.3.2012 and also to some more items.
  • EPCG Scheme & SHIS not available simultaneously in the same year. CBEC Cir.38/2010 Cus dt 27.9.2010
Installation Certificate:  
  • CEx officers will verify and issue installation certificate in respect of units registered with CEX department.
  • For others independent Chartered Engineer will issue a certificate. For detailed procedure please read CBEC Circular 14/2008-Cus. dt. 26.9.2008
Export Obligation - Monitoring and verification: