Zero Duty EPCG 1992-97
Ntfn 111 In exercise of the powers conferred
05.06.95 by sub-section (1) of
section
25 of the Customs
Act, 1962 (52 of 1962), the Central Government, being satisfied that it is
necessary in the public interest so to do, hereby exempts goods as specified in
the Table annexed hereto from whole of the duty of customs leviable
thereon which is specified in the First Schedule to the Customs Tariff Act,
1975 (51 of 1975) and so much of the additional duty leviable thereon under
section 3 of the said Customs Tariff Act, as is in excess of the amount
calculated at the rate of 10% of the value of goods:
Provided
that where the said goods are required for the manufacture of leather garments,
textile garments (including knitwears), agro products and products of
horticulture, floriculture and poultry, such goods shall be exempt from the
whole of the additional duty leviable thereon under section 3 of the said
Customs Tariff Act.
2. The exemption contained in paragraph 1, shall be subject
to the following conditions, namely:-
(1)
The goods imported are covered by a valid licence under the Export Promotion
Capital Goods (EPCG) Scheme in terms of Export and Import Policy (hereinafter
referred to as the said policy) permitting import of goods free of duty and the
said licence is produced for debit by the proper officer of the customs at the
time of clearance;
[Provided
that for the import of spare parts, the validity period of the licence shall be
deemed to be the period permitted for fulfillment of the export obligation in
full]. Inserted by
70/10.09.96
(2) The
importer at the time of clearance products to the Assistant Commissioner of
Customs, a certificate from the Licensing Authority having executed a legal
undertaking in terms of paragraph 45 of the said policy; Omitted by
145/19.09.95
(3) The importer executes a bond in
such form and for such sum and with such surety or security as may be specified
by the Assistant Commissioner of Customs binding himself to fulfill export
obligation equivalent to six times the CIF value of the goods imported on FOB
basis, or four times of the CIF value on Net Foreign Exchange basis as
specified in the licence, or for such higher sum as may be fixed by the
Licensing Authority, within a period of eight years in the following
proportions:-
|
SNo. |
Period from the date
of issue of licence |
Proportion of total
export obligation |
|
1. |
Block of 1st and 2nd year |
NIL |
|
2. |
Block of 3rd and 4th year |
15% |
|
3. |
Block of 5th and 6th year |
35% |
|
4. |
Block of 7th and 8th year |
50% |
"Provided further that where a
sick unit notified by the Board for Industrial and Financial Reconstruction
(BIFR) is subsequently taken over by another unit for revival, the export
obligation may be fulfilled within a period of 12 years from the date of issue
of license:
Provided also that export obligation
of a particular block may be set off by the excess exports made in the said
preceding block(s).
[Substituted by 116/28.10.2002]
(4) The importer produces within 30 days from the expiry
of each block of two years from the date of issue of licence from the second
block or within such extended period as the Assistant Commissioner of Customs
may allow, evidence to the satisfaction of the Assistant Commissioner of
Customs showing the extent of export obligation fulfilled, and where the export
obligation of any particular block of two years is not fulfilled in terms of
the preceding condition, the importer shall within three months from the expiry
of the said block pay duties of customs of an amount equal to that portion of duties
leviable on the goods but for the exemption contained herein which bears the
same proportion as the unfulfilled portion of the export obligation bears to
the total export obligation together with interest at the rate of 15%
per annum from the date of clearance of the goods. [Amended by 113/16.08.02]
(5) The importer, shall, if he fails to discharge a
minimum of 25% of the export obligation prescribed for any particular block of
two years for two consecutive blocks, be liable to pay forthwith, the whole of
the duties of customs leviable on the goods imported but for the exemption
contained in this notification together with interest at the rate of 15%
per annum from the date of clearance of the goods.
(6) The importer shall, if he fails to import goods for a
minimum value of twenty crores of rupees within the validity period of the
import licence, be liable to pay forthwith the whole of the duties of customs
leviable on the goods imported but for exemption contained in this notification
together with interest at the rate of 24% per annum from the date of clearance
of the goods;
(7) The capital goods imported, assembled
or manufactured are installed in the importer’s factory or premises and a
certificate from the jurisdictional Assistant Commissioner of Central Excise or
independent Chartered Engineer, as the case may be, is produced confirming
installation and use of capital goods in the importer’s factory or premises,
within six months from the date of completion of imports or within such
extended period as the said Assistant Commissioner of Customs may allow. [Condition
No. 7 substituted by 42/30.06.98]
(8) Notwithstanding anything contained
in conditions (4) and (5), where the Licensing Authority grants
extension of block wise period for any block(s) or overall period of
fulfilment of export obligation upto a period of two years or
regularisation of shortfall in export obligation not exceeding 5 per cent of
such export obligation, the said block wise period or overall period of export
obligation may be extended and the said shortfall in export obligation be
condoned by the Assistant Commissioner of Customs or Deputy Commissioner of
Customs.
[Condition No. 8 substituted by
49/24.04.2002]
Provided that having overall export
obligation period of 12 years extension of block wise period of export
obligation shall not be allowed for more than one block of two years;
[Substituted by 116/28.10.2002]
Provided further that extension of block
wise period of export obligation for the fourth block of two years shall not be
allowed for a period of more than one year”.
|
Table |
|
|
SNo |
Description of Goods |
|
1. |
Capital goods |
|
2. |
Capital goods in
SKD/CKD condition to be assembled into capital goods by the importer |
|
3. |
Components of
capital goods required for assembly or manufacture of capital goods by the
importer |
|
4. |
Spare parts |
Explanation: in this notification,-
(1) “Capital goods” means any plant, machinery,
equipment and accessories required for -
(a) manufacture of production of other goods, including
packaging machinery and equipment, refractories, refrigeration equipment, power
generating sets, machine tools, catalysts for initial charge, and equipment and
instruments for testing, research and development, quality and pollution
control;
(b) use in manufacturing,
mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture,
pisciculture, poultry and sericulture;
(2) “Export and Import Policy” means the Export
and Import Policy 1 April 1992 - 31 March 1997 (Revised Edition: March 1995)
published vide notification of the Government of India in the Ministry of
Commerce, No. 1(RE-95)/92-97 dated the 31st March, 1995;
(3) “Licensing Authority” means
the Director General, Foreign Trade appointed under section 6 of the Foreign
Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer
authorised by him to grant a licence under the said Act;
(4) “CIF value”, in relation
to second hand capital goods, means the CIF value of the corresponding new
capital goods; Omitted by 154/27.10.95
(5) “Export obligation” means-
(i) export to a place outside India of
products manufactured with the use of capital goods imported, assembled or
manufactured in terms of this notification; or making of supplies of such
product in terms of clauses (a), (c), (e), (f) and (i) of paragraph 121 of the
Export and Import Policy and para 10.2(g) of the Export and Import Policy
1997-2002 corrected upto 13th April, 1998; and
(ii) export
of goods in terms of the notification of the Government of India in the
Ministry of Commerce and Industry (Department of commerce) No 28
(RE-2003)/2002-2007 dated 28th January 2004. [Sub-clause 5(ii) inserted by
29/28.01.2004]
(6) “Net foreign exchange”
means FOB value of products exported in discharge of obligation in terms of
this notification minus CIF value of inputs used in manufacture thereof where
such inputs have been-
(a) imported
by the importer directly;
(b) imported
by another person and supplied to importer without undergoing any process of
manufacture;
(c) procured
indigenously, for which the importer claims replenishment under the Duty
Exemption Scheme as contained in Chapter VI of the Export and Import Policy.
Notification History: Original
No/date: 111/05.06.95
Amended by 146/19.09.95; 154/27.10.95;
32/17.06.96; 70/10.09.96; 96/19.12.96; 49/24.04.2002; 113/16.10.2002;
116/28.10.2002
70/16.09.97 – The notification to
slaps a countervailing duty of 10 percent on EPCG imports applies only to the
nil duty scheme which covers large size projects. The
full exemption of countervailing duty on scheme for small size projects
continues but for the special customs duty hike to five percent which will
apply on these projects too. Further, projects for the manufacture of leather
and textile garments along with agro industries have been excluded form the
impost. Nonetheless, the Government hopes to mop up Rs 300 crores as additional
duty revenue from the change. Quite a few large size projects are coming up in
India targeted at both the local and global market. Now they will be forced to
at least examine the option of looking at the Indian manufacture for sourcing supplies.
88/12.12.97; 08/23.04.98; 42/30.06.98
75/09.10.98
– Capital goods including jigs, fixture, dies and moulds have been omitted from
the EPCG scheme concessional duty notifications. The concession is applicable
only on spares import. [Condition No. 8 amended by 56/11.05.99];
29/28.01.2004