Customs - Exemption to Goods Imported under Post Export EPCG Duty Credit Scrip
PARA 5.11 of the Foreign Trade Policy, which provides for duty remission in proportion to export obligation fulfilled, reads as:
Post Export EPCG Duty Credit Scrip(s)
(a) EPCG Duty Remission Scheme shall be available to exporters who intend to import / procure capital goods on full payment of applicable duties and choose to opt for this scheme.
(b) Duty paid on Capital Goods (excluding portion CENVATed / Rebated) shall be remitted in the form of freely transferable duty credit scrip(s).
(c) Specific EO under this Scheme shall be 85% of the applicable specific EO, if the imports of such Capital Goods had taken benefit of duty exemption. Average EO continues to remain unchanged.
(d) Duty remission shall be in proportion to the EO fulfilled.
(e) These Duty Credit Scrip(s) can be used for payment of applicable custom duties for imports and applicable excise duties for domestic procurement.
(f) All provisions of the existing EPCG Scheme shall apply insofar as they are not inconsistent with this scheme.
This Scheme was introduced in the Foreign Trade policy supplement 2012 announced on 05.06.2012. The Commerce minister Anand Sharma in his speech while releasing the Annual Supplement said:
We are now introducing a new post-export EPCG scheme. This scheme provides flexibility to exporters for importing capital goods on payment of duty, based on which an Export Obligation at a level of 85% to the original shall be stipulated. Thereafter, the exporter will be entitled to obtain Duty Free Scrips in proportion to the actual exports effected, thereby doing away with the requirement of monitoring the Export Obligation, thus reducing the transaction cost .
All the grandiose schemes of the Commerce Ministry will become reality only when the Finance ministry recognises the scheme and issues the relevant notification.
In Circular No. 20/2012-Cus dated 27.07.2012, the CBEC clarified,
There are certain areas of change in the FTP for which notifications shall be issued subsequently to make them operational. These include making operational the scheme of Post Export EPCG duty credit scrip (para 5.11 of FTP) for which modalities are being worked out in consultation with DGFT .
Now, after 8 months of the announcement in the FTP, Revenue has issued the notification exempting goods when imported into India against a Post Export EPCG duty credit scrip.
It takes the Board eight long months to issue a notification to make the Foreign Trade policy of this country, operational!
Notification No. 05 and Dated: February 18, 2013