The Indian government offers several schemes to support exporters and promote international trade. This article will explore the Export Promotion Capital Goods (EPCG) Scheme and the Duty Exemption and Remission schemes, focusing on their objectives, benefits, and key features.
EPCG Scheme: Incentivizing Capital Goods Imports for Exporters
The Export Promotion Capital Goods (EPCG) Scheme is designed to support exporters of electronic products. The scheme facilitates the import of capital goods for:
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Pre-production
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Production
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Post-production (including CKD/SKD)
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Computer software systems.
The scheme allows these imports at reduced or zero customs duties, subject to an export obligation.
Key Features of the EPCG Scheme:
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Zero Duty EPCG Scheme: Allows duty-free imports of capital goods with an export obligation equivalent to 6 times of the duty saved, to be fulfilled in 6 years.
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Concessional 3% Duty EPCG Scheme: Provides a concessional 3% duty on imports with an export obligation equivalent to 8 times the duty saved over a period of 8 years.
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Coverage: Capital goods include spares, tools, jigs, fixtures, dies, and molds, as well as second-hand capital goods.
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DTA Sales: The export obligation can also be fulfilled by supplying ITA-1 items to the Domestic Tariff Area (DTA), provided payment is in free foreign exchange.
Duty Exemption and Remission Schemes: Facilitating Duty-Free Imports
The Duty Exemption and Remission schemes are designed to reduce duty burdens on imports used for export production. The broad categories are:
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Duty Exemption Schemes: Allow duty-free imports of inputs required for export production.
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Advance Authorisation Scheme
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Duty Free Import Authorisation (DFIA) scheme
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Duty Remission Schemes: Enable post-export replenishment or remission of duty on inputs used in exported products.
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Duty Entitlement Passbook (DEPB) Scheme
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Duty Drawback (DBK) Scheme
Access to Information:
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Detailed information on the EPCG scheme can be found in Chapter 5 of India’s Foreign Trade Policy and Procedures on the website of the Department of Commerce, Ministry of Commerce & Industry.
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Details on Duty Exemption and Remission Schemes are available in Chapter 4 of the same policy document.
Conclusion:
These export-promotion schemes are vital tools for supporting India’s exporters by reducing the cost of importing capital goods and raw materials. By understanding the requirements of the EPCG scheme, along with Duty Exemption and Remission schemes, exporters can better utilize available resources and contribute to the growth of the Indian economy.