Export Promotion Capital Goods Scheme

Capital goods including jigs, fixtures, dies and moulds may be imported at a concessional rate of customs duty as per table given below. Subject to an export obligation to be fulfilled over a period of time. In addition spares up to 20 per cent of the cost insurance and freight (CIF) value of the capital goods may also be imported under the scheme.
Under this scheme Customs duty is 5% if the export obligation is 5 times the CIF value of the capital goods or 4 times the CIF value of capital goods on NEF basis. The period of fulfillment of the export obligation is 8 years reckoned from the date of issuance of licence.
Period from the date of issue of licence Proportion of total export obligation
Block of 1st and 2nd year nil
Block of 3rd and 4th year 15%
Block of 5th and 6th year 35%
Block of 7th and 8th year 50%

The licence holder under EPCG scheme shall fulfill the export obligation over the specified period in the following proportions:
An application for grant of license under this scheme should be made to the licensing authority .Before clearance of goods through customs, the importer has to execute a bond supported by a bank guarantee with the Customs Authority in the prescribed manner. The license holder will also have to submit progress report of the export/supplies made and services provided, duly certified by a Charted Accountant/Cost and Works Accountant to the Licensing Authority. For Customs duty exemption exemption in respect of imports under EPCG scheme, the Ministry of Finance has issued Notification No. 28/97-Cus. & 29/97-Cus., both dated 1st April, 1997.