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EPCG Licence (Custom)

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This query is : Resolved

Author : Anonymous

( Author )
19 March 2010

Dear Members,

I have a query regarding EPCG Licence. One of my client import's machines under EPCG licence by paying reduced rate of customs duty.

I need information in respect of the following:

a) Conditions to be fullfilled in respect of imports.
b) Export obligations/conditions if any.
c) Documentation ( including exports and third party exports)
d) Filling of Returns.
e) Others if any

Thanks & regards

Tejashwini


CA. B.SRINIVASULU

( Expert )
20 March 2010

In the licence itself you will get the conditions on which licence is given and the export obligation.

Once you make the export then you have to inform DGFT about the same.

On completion of the targets given in EPCG you have to submit with customs bill of lading and firc for receipt of amount and a certificate from ca and your banker and submit all the details to dgft.

DGFT will verify and certify the same. Then you have to file to customs and get back you bank guarantee for cancellation.


RAMESH KUMAR VERMA

( Expert )
20 March 2010

kind attn :- tejashwini ,

REPLY,
A) AND B AND D ) AS PER HAND BOOK OF PROCEDURES VOL (1) 2009-2014, AS PER PARA NO. 5.7.1
EPCG AUTHORIZATION HOLDER SHALL EXPORT EITHER DIRECTLY OR THROUGH THIRD PARTY(S). IF A MERCHANT EXPORTER IS EPCG AUTHORIZATION HOLDER, NAME OF SUPPORTING MANUFACTURER SHALL ALSO BE INDICATED ON SHIPPING BILLS. AT THE TIME OF EXPORT, EPCG AUTHORIZATION NO & DATE SHALL BE ENDORSED ON SHIPPING BILLS WHICH ARE PROPOSED TO BE PRESENTED TOWARDS DISCHARGE OF EXPORT OBLIGATION.”
AS PER HAND BOOK OF PROCEDURES VOL (1) 2009-2014, ACCORDING PARA 5.9 “AUTHORIZATION HOLDER SHALL SUBMIT TO REAGIONAL LICENSING AUTHORITY BY 30 APRIL OF EVERY YEAR, REPORT ON FULFILLMENT OF EXPORT OBLIGATION. CONCERNED RA MAY ISSUE PARTIAL EXPORT OBLIGATION FULFILLMENT CERTIFICATE, PROVIDED EXPORT PERFORMANCE IS PROPORTINELY ADEQUATE TO FULFILLMENT OF EXPORT OBLIGATION.”
AS PER HAND BOOK OF PROCEDURES VOL (1) 2009-2014, ACCORDING PARA 5.11
“CONCERNED REAGIONAL LICENSING AUTHORITY CONSIDER ONE OR MORE REQUEST FOR GRANT OF EXTENSION IN EXPORT OBLIGATION PERIOD, ON PAYMENT OF COMPOSSITION FEE EQUAL TO 2% OF PROPORTINATE DUTY SAVED AMOUNT ON UNFILFILLED EXPORT OBLIGATION OR AN ENHANCEMENT IN EXPORT OBLIGATION IMPOSED TO THE EXTENT OF 10% OF TOTAL EXPORT OBLIGATION IMPOSED UNDER AUTHORISATION, AS THE CASE MAY BE, AT THE CHOICE OF EXPORTER, FOR EACH YEAR OF EXTENSION SOUGHT. SUCH FIRST EXTENSION IN E.O. PERIOD CAN BE FOR A MAXIMUM PERIOD OF 2 YEAR”
AS PER HAND BOOK OF PROCEDURES VOL (1) 2009-2014, ACCORDING PARA 5.13
“AS EVIDENCE OF FULFILLMENT OF EXPORT OBLIGATION AUTHORIZATION HOLDER SHALL FURNISH APPLICATION IN ANF-5B WITH DOCUMENTS PRESRCRIBED THERIN. ON BEING SATISFIED, RA CONCERNED SHALL ISSUE A CERTIFICATE DISCHARGE OF EXPORT OBLIGATION TO THE EPCG AUTHORISATION HOLDER AND ALSO SEND A COPY TO CUSTOM AUTHORITIES WITH WHOM BG/ BOND (LUT) HAS BEEN EXECUTED.
AS PER HAND BOOK OF PROCEDURES VOL (1) 2009-2014, ACCORDING PARA 5.14
IN CASE, EPCG AUTHORISATION HOLDER FAILS TO FULFILL EXPORT OBLIGATION, HE SHALL PAY DUTY OF CUSTOM PLUS INTEREST AS PRESCRIBED BY CUSTOMS AUTHORITY.
AS PER HAND BOOK OF PROCEDURES VOL (1) 2009-2014, ACCORDING PARA 5.15
“EVERY EPCG AUTHORISATION HOLDER SHALL MAINTAIN, FOR A PERIOD OF 3 YEAR FROM DATE OF REDEMPTION.”
ACCORDING PARA, 5.17, IN CASE OF FAILURE OF EXPORT OBLIGATION OR ANU OTHER CONDITION OF AUTHORISATION , AUTHORISATION HOLDER SHALL BE LIABLE FOR ACTION UNDER FOREIGN TRADE (D&R) ACT, 1992 ORDER AND RULES MADE UNDER , PROVISION , OF FTP & CUSTOM ACT, 1962.”
CONDITION FOR IMPORT OF CAPITAL GOODS AS PER FOREIGN TRADE POLICY 2009-2014, ACCORDING PARA 5.4”
“IMPORT OF CAPITAL GOODS SHALL BE SUBJECT TO ACTUAL USER CONDITION TILL EXPORT OBLIGATION IS COMPLETTED.”

REPLY OF POINT C),
IN CUSTOM, FOR REGISTRATION OF EPCG LICENCE:-
ORIGINAL LICENCE, 15% BANK GUARANTEE OF DUTY SAVED AMOUNT (IF TURNOVER IS LESS THAN 5 CRORE) OTHERWISE BOND WILL ACCEPTED BY CUSTOM.

REPLY OF POINT D & E)
MONITORING OF INSTALLATION CERTIFICATE:-
IN TERMS OF NOTIFICATION NOS. 44/2002 DATED 19.04.2002 & 64/2008 DATED 09.05.2008, THE IMPORTER HAS TO PRODUCE INSTALLATION CERTIFICATE DULY SIGNED BY THE JURISDICTIONAL CENTRAL EXCISE AUTHORITY (IF THE IMPORTER IS NOT REGISTERED WITH THE CENTRAL EXCISE AUTHORITY, THEN BY THE CHARTERED ENGINEER) WITHIN THE PERIOD OF SIX MONTHS FROM THE DATE OF IMPORT CLEARANCE.

have u any query, please tell us , experts of ca friend club remain you,
thanks,



RAMESH KUMAR VERMA

( Expert )
20 March 2010

for more information please email me:-

ramesh.arti@sify.com


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