21 March 2009
hi sub: query regarding EPCG scheme Custom duty on import of capital good (eg. an embroidery machinery) under EPCG scheme is 3%. Now this 3% duty shows the basic custom duty as the import also includes 8% CVD so will the CVD be charged. Also want to know details regarding EPCG scheme as you can provide regarding cash subsidy. Waiting for your reply as soon as possible Thanks Regards C.A Ankit
22 March 2009
EPCG license is issued by DGFT; procedure, form etc. you can find on DGFT web site. Under this lecense you can import capital goods for use in manufacture of export products. You have to fulfill and export obligation of approx 10 times in 10 years (it differs slightly for different classes of persons). Unless until export obligation is fulfilled, the imported capital goods cannot be sold. If you have a valid EPCG license, you can get same capital goods even from doemstic market after invalidation of the license, and excise duty refund can be claimed. The supplier will get all benefits of deemed export. At the time of import 3% custom duty is payable. No cenvat can be taken of this amount. With reduction in duty rate (capital goods attarct rates of BCD as low as 5% and max 7.5%), the scheme is loosing its popularity as compliance cost with various procedure eats whatever benefit exporter get.
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