Directorate General of Foreign Trade (DGFT) has issued Public Notice No. 15/2024-25, amending Chapter 5 of the Handbook of Procedures (HBP) 2023 concerning the Export Promotion Capital Goods (EPCG) Scheme. Effective from July 25, 2024, these amendments aim to reduce compliance burdens and enhance ease of doing business. Key changes include extending the period for submitting installation certificates from six months to three years, updating fees for extending export obligation periods, and introducing new provisions for composition fees. The revised rules allow more flexibility in compliance and adjustments for export obligations. The amendments are designed to streamline procedures and support businesses under the EPCG Scheme, reflecting a commitment to improving the regulatory framework.
****
DGFT simplifies Export Promotion Capital Goods Scheme procedures to enhance Ease of Doing Business
Posted On: 26 JUL 2024 1:58PM by PIB Delhi
The Directorate General of Foreign Trade (DGFT) has announced significant enhancements to the Export Promotion Capital Goods (EPCG) Scheme aimed at simplifying processes, reducing transaction costs and promoting automation to benefit exporters vide Public Notice No. 15 dated 25th July 2024. These changes align with the commitment of the Government to create a more business-friendly environment and improving India’s manufacturing competitiveness.
As per the changes, the scheme will now provide exporters an extended period to submit Installation Certificates for imported Capital Goods. This extension reduces pressure on businesses, allowing them to focus more on production and export activities.
Further, a simplified and reduced composition fee structure for extending the Export Obligation (EO) period has been introduced. This change minimises manual intervention, streamlines compliance and speeds up service delivery.
Also, from now all Policy Relaxation Committee (PRC) decisions regarding Export Obligation extensions and regularisation of exports will be implemented with a levy of uniform composition fee making it easier to implement through the system.
Benefits for Exporters:
These updates make it easier for exporters to comply with regulations, reducing the time and effort required to meet DGFT requirements. By expanding automated rule-based processes, DGFT aims to reduce human intervention, mitigate risks and improve overall efficiency in trade facilitation.
Commitment to Modernization and Efficiency:
Since the announcement of the new Foreign Trade Policy in April 2023, DGFT has been actively modernising its systems to expand automated rule-based processes. These initiatives are crucial steps towards fostering a more business-friendly environment and enhancing India’s competitiveness in the global market. DGFT has already taken efforts to automate the authorisation issue process, ad-hoc norms fixation process under Advance Authorisation, export obligation extension, automatic status holder certificate issue, among others, in recent days. It is planned that in the coming months, more and more processes will be system driven with minimal or no human intervention to order to facilitate trade and industry.
For more details on these updates, please visit DGFT Website at https://www.dgft.gov.in
***
GOVERNMENT OF INDIA
MINISTRY OF COMMERCE AND INDUSTRY
DEPARTMENT OF COMMERCE
DIRECTORATE GENERAL OF FOREIGN TRADE
VANIJYA BHAVAN, NEW DELHI
Public Notice No. 15/2024-25- DGFT | 25th July, 2024
Subject: Amendments in Chapter 5 of the Handbook of Procedures (HBP) 2023, related to Export Promotion Capital Goods Scheme to reduce ‘Compliance Burden’ and enhance ‘Ease of doing Business’ — reg.
In exercise of powers conferred under Paragraphs 1.03 and 2.04 of the Foreign Trade Policy, 2023, as amended from time to time, the Director General of Foreign Trade hereby makes the following amendments in Chatter 5 of the HBP 2023 with immediate effect. –
| S. No. | Para No. | Existing provision | Revised provision | ||||||||||||||||||||||||
| 1 | 5.04(a) | Authorisation holder shall produce, within six months from date of completion of import, to the concerned RA, a certificate from the jurisdictional Customs authority or an independent Chartered Engineer, at the option of the authorisation holder, confirming installation of capital goods at factory/premises of authorisation holder or his supporting manufacturer(s). The RA may allow one time extension of the said period for producing the certificate by a maximum period of 12 months with a composition fee of Rs. 5000/-. Where the authorisation holder opts for independent Chartered Engineer’s certificate, he shall send a copy of the certificate to the jurisdictional Customs Authority for intimation/record. The authorisation holder shall be permitted to shift capital goods during the entire export obligation period to other units mentioned in the IEC and RCMC of the authorisation holder subject to production of fresh installation certificate to the RA concerned within six months of the shifting. |
Authorization holder shall produce, within 3 years from date of completion of import, to the concerned RA, a certificate from the jurisdictional Customs authority or an independent Chartered Engineer, at the option of the authorisation holder, confirming installation of capital goods/spares at factory/premises of authorization holder or his supporting manufacturer(s). The RA may allow extension of the said period for submission of certificate, upto valid EO period with a payment of a composition fee of Rs. 10,000/- per year by the authorisation holder. Where the authorisation holder opts for independent Chartered Engineer’s certificate, he shall send a copy of the certificate to the jurisdictional Customs Authority for intimation/record. The authorization holder shall be permitted to shift capital goods during the entire export obligation period to other units mentioned in the IEC and RCMC of the authorization holder subject to production of fresh installation certificate to the RA concerned within six months of the shifting. | ||||||||||||||||||||||||
| 2. | 5.04(b) | In the case of import of spares, the installation certificate shall be submitted by the Authorisation holder within a period of three years from the date of import. | Deleted. | ||||||||||||||||||||||||
| 3. | 5.13(c) | Request for extension of Export Obligation period of first block shall be submitted within 6 months from the ate of expiry of first block EO period along with composition fee of 2% on duty saved amount proportionate to unfulfilled portion of EO pertaining to the block. RA may consider the request for extension of block wise EO period, received after 6 months, but within 6 years from date of issue of authorisation, with a late fee of Rs. 10,000/- per authorisation. Application made beyond 6 years, for extension of block-wise EO period for regularization purpose, shall also be considered by RA concerned, with an additional late fee of Rs. 5,000/- for each year per authorisation. This late fee is in addition to the composition fee that may be payable on account of shortfall in export obligation. Where EO of the first block is not fulfilled in terms of para (a) above, except in cases where the EO prescribed for first block is extended by the RA, the Authorisation holder shall. within 6 months from the expiry of the block, pay duties of customs (along with applicable interest as notified by DOR) proportionate to duty saved amount on total unfulfilled EO of the first block. | Request for extension of Export Obligation period of first block shall be submitted within 6 months from the date of expiry of first block EO period along with composition fee as under :-
RA may consider the request for extension of block-wise EO period, received after 6 months, but within 6 years from date of issue of authorisation. with composition fee as under :-
Application made beyond 6 years, for extension of block-wise EO period for regularization purpose, shall also be considered by RA concerned, with composition fee as under :-
No refund of earlier paid Composition Fee shall be admissible. Where EO of the first block is nonfulfilled in terms of para (a) above, except in cases where the E0 prescribed for first block is extended by the RA, the Authorisation holder shall, within 6 months from the expiry of the block, pay duties of customs (along with applicable interest as notified by DOR) proportionate to duty saved amount on total unfulfilled EO of the first block. |
||||||||||||||||||||||||
| 4. | 5.13(e) | New provision | Notwithstanding sub-para (d) above, sub-para (c) above shall also be applicable for authorisations issued under FTP (201520). | ||||||||||||||||||||||||
| 5. | 5.16(b) | In case of extension of Export obligation period beyond 6 years, two extensions, from date of expiry, of one year each may be considered by RA concerned, on payment of composition fee equal to 2% of proportionate duty saved amount on unfulfilled export obligation for each year of extension However, minimum composition fee shall be Rs. 10,000/-. |
In case of extension of Export obligation period beyond 6 years, two extensions, from date of expiry, of one year each or two years in one go at the choice of authorisation holder, may be considered by RA concerned with composition fee as under :-
No refund of earlier paid Composition Fee shall be admissible. |
||||||||||||||||||||||||
| 6. | 5.16(e) | New provision | For implementation of all ARC decisions involving levy of Composition Fee while allowing extension in block-wise/EO period and/or regularisation of exports already made, the applicable Composition Fee shall be as under :-
No refund of earlier paid Composition Fee shall be admissible. |
Effect of this Public Notice: With a view to enhance ease of doing business and reduce the compliance burden, certain provisions of Chapter 5 related to the Export Promotion Capital Goods Scheme of the Handbook of Procedures, 2023 are amended for EPCG authorizations issued under Foreign Trade Policy.
(Santosh Kumar Sarangi)
Director General of Foreign Trade
Ex-officio Additional Secretary, Government of India
Email: dgftgnic.in
[Issued from File No. 18/-19/AM-25/P-5]
