“Considering the size of our economy and our potential, manufacturing and service industry base, there is a huge potential for exports to grow. At a time when the country is on the AatmaNirbhar Bharat mission one of its goals is to increase India’s share in the global supply chain in exports manifold.”
- Honourable Prime Minister Shri Narendra Modi.
The objective of the Export Promotion Capital Goods (EPCG) Scheme is to facilitate import of capital goods for producing quality goods and services and enhance India's manufacturing competitiveness. EPCG Scheme allows import of capital goods for pre-production, production and post-production at zero customs duty. Alternatively, the exporter may also procure Capital Goods from domestic market. The Export Promotion Capital Goods (EPCG) Scheme allows the importation of capital goods and machinery to produce goods for export, aimed to give Indian manufacturers a competitive edge.
Check list for application of EPCG license:
Name of the Applicant – As mentioned in PAN
Category of Applicant – Merchant Exporter/Manufacturing Exporter/Service provider.
Date of Application
Is the application in prescribed form? - Yes/No
Have all the columns in the application form duly filled – Yes/No
Has the single port of registration been indicated? – Yes/No
Are the products mentioned in the application form included in the industrial license/IEM/SSI certificate? – Yes/No
Have the Basic duty/Additional duty/Special Additional duty been taken into account and properly calculated considering Assessable value (CIF+ Landing charges)? – Yes/No
Have the details of the application fee duly indicated and properly filled? Yes/No.
Is the head of account correctly shown for payment?
Designation of Signatory – Managing Director/Director/partner – shown in the application? Yes/No
Is the DD/Pay order drawn in favour of Joint Director General of Foreign trade? – Yes/No
Let’s have a look at the complete list of the documents required for the EPCG license application to the DGFT.
Import Export Code (IEC Code) - Mandatory
DGFT Digital Signature - Mandatory
Registration-cum-membership Certificate (RCMC) - A self-certified copy of the registration certificate along with proof of membership payment has to be submitted.
MSME/SSI/Udyog Aadhar/IEM/Industrial License - MSME/SSI Registration.
Udyog Aadhar Registration, IEM (Industrial Entrepreneurs Memorandum), Industrial License. Export product for which the EPCG License is applied & factory address where the machinery will be installed should be present in the above certificates.
GST Certificate (if applicable) - A self-certified copy of the GST certificate
Pro forma Invoice / Purchase order - A copy of the Proforma invoice or purchase order
ANF – 5A (Application form)
Appendix – 5A (CE Certificate) - DGFT requires a certification from an Independent & reputed Chartered Engineer (CE).
Appendix – 5B (CA Certificate) - a certificate from either Chartered Accountant, Cost Accountant or Company Secretary is mandatory to certify the last 3 financial year turnover of the same/similar products.
Government Official Application Fees / EFT Payment proof - 0.1% of the Duty saved value, which is to be paid online to the DGFT. Non submission of receipt of payment will lead to rejection of application.
Statement of Duty Saved Amount - A detailed statement indicating CIF Value, bifurcation of duties imposed, Duty saved value, specific and average export obligation to be imposed needs to be submitted
Necessary Declarations - necessary declaration on the applicant’s letterhead needs to be submitted stating that "the capital goods sought to be imported are not under the restricted category".
EPCG is intended for promoting exports and the Indian Government with the help of this scheme offers incentives and financial support to the exporters. Heavy exporters could benefit from this provision. However, it is not advisable to go ahead with this scheme for those who don’t expect to manufacture in quantity or expect to sell the produce entirely within the country, as it could become almost impossible to fulfil the obligations set under this scheme.
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