Epcg and advance authorisation license transfer

Mr. Patel Ji,

As per present Foreign Trade Policy 2009-14 supplemented by different notifications time to time, the normal validity period of zero duty EPCG Authorization is 9 months and that of 3% EPCG Authorization is 24 months. The licensing Authority may revalidate authorization for six months at a time and maximum up to 12 months from the date of expiry of validity. For the purpose of monitoring export obligation, the EPCG Authorization holder is required to indicate the details of EPCG Authorization on the Shipping Bill and Commercial invoice,in case of deemed exports. After fulfillment of specified export obligation, the Authorization holder submits relevant export documents along with EPCG Authorization to the DGFT authorities for the purpose of obtaining EO discharge certificate. After obtaining export obligation discharge certificate from DGFT, the Authorization holder produces the same before Customs for the purpose of obtaining redemption of bond and Bank Guarantee filed by EPCG Authorization holder.

For the purpose of monitoring and ensuring on export obligation fulfillment by EPCG Authorization holder, block wise export obligation is also specified by licensing authority based on the guidelines of Foreign Trade Policy amended time to time.

Present Foreign Trade Policy allows EPCG authorization holder to extend block-wise period for any block or overall period of fulfillment of export obligation up to a period of two years on payment of composition fee equal to 2% of proportionate duty saved amount on unfulfilled export obligation for each year of extension. The Licensing authority grant further extension in the overall period of EO up to a period of further two years if the authorization holder pays 50% of differential duty on the unfulfilled portion of export obligation and agrees to fulfill other conditions as may be specified by the Regional Authority (Licensing Authority) for this purpose.

At present, the EPCG holder under zero duty scheme can avail only one extension of two years in export obligation period shall be available subject to conditions mentioned.

As per the present Foreign Trade Policy, under an EPCG scheme, exports in discharge of export obligation are entitled to duty neutralization schemes like Drawback, Advance Authorization, DFIA etc. as well as benefits of reward schemes such as FPS, FMS, VKGUY etc. in accordance with the terms and conditions of those schemes. But as per Foreign Trade Policy amended time to time with annual supplements, benefits under reward schemes like TUFS and SHIS can not be in the year in which the zero duty authorization has been issued.

Under EPCG scheme, the capital goods imported are subject to actual user condition and the goods imported cannot be transferred or sold till the fulfillment of export obligation. In order to ensure that the capital goods imported under EPCG scheme are utilized in the manufacture of resultant export product, after importation and clearance of capital goods from Customs area at importing location, the Authorization holder is required to produce certificate from the jurisdictional Central Excise Authority or Chartered Engineer confirming installation of such capital goods in the declared premises. At present, a period of 6 months is allowed for the purpose of installation of capital goods and commencement of production. This period may be extended by the Assistant/Deputy Commissioner of Customs.

Further must read the fiollowing link:

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