Streamlined Overview of the EPCG Scheme for Exporters

What is the EPCG Scheme?

The Export Promotion Capital Goods Scheme (EPCG Scheme) allows Indian exporters to import capital goods (machinery) duty-free for manufacturing export products. This scheme aims to enhance India’s competitiveness in the global market.

Benefits of EPCG Scheme:

  • Reduced Production Costs: Importers save significantly on import duty, making their products more price-competitive.

  • Improved Quality: Access to advanced machinery allows for better quality production.

Who can Apply?

  • Manufacturer Exporters

  • Merchant Exporters with supporting manufacturers

  • Service Providers (with specific conditions)

Types of Capital Goods Eligible:

  • All types of machinery (including knocked-down and fully assembled)

  • Associated software and computer systems

  • Molds, spares, jigs, dies, tools, and refractories

  • Catalysts (initial and one subsequent charge)

Key Points to Consider:

  • Export Obligation: Exporters must fulfill a specific export obligation within a set timeframe (usually 6 years).

  • Actual User Condition: Imported capital goods cannot be sold domestically until the export obligation is met.

  • Indigenous Sourcing: Capital goods can also be procured from domestic manufacturers with duty exemption (deemed export benefits).

Documents Required for EPCG License:

  • Proforma Invoice/Purchase Order of Capital Goods

  • Copy of IEC, RCMC, MSME/SSI Registration, GST Certificate

  • Details of Capital Goods (HSN code, name, model number, technical description)

  • List of Export Products (HSN code)

  • Chartered Engineer Certificate (linking capital goods to export products)

  • CA Certificate (showing last three years’ turnover)

  • Factory address where the machine will be installed

  • Stepwise process/flowchart for capital goods usage

  • Detailed explanation of capital goods end-use for export products

Our Services:

  • Explain EPCG terms and conditions to ensure informed decision-making.

  • Assist in EPCG license application document preparation.

  • Facilitate EPCG license issuance from DGFT.

  • Guide through procedural requirements and compliances.

  • Aid in obtaining amendments, revalidation, or extension of EPCG license.

  • Support in acquiring redemption letter (DGFT) and bond/BG release after fulfilling export obligations.

Let us help you utilize the EPCG Scheme and boost your export Competitiveness!