Deen Dayal Upadhyaya Sahkarita Kisan Kalyan Yojana 2026

The EPCG Scheme aims to boost India's manufacturing and export competitiveness by allowing businesses to import capital Read More... goods needed for production at zero customs duty. Read less

Details

Looking to upgrade your manufacturing setup to produce world-class goods for export? The Export Promotion Capital Goods (EPCG) Scheme could be your ticket to doing just that, without the burden of heavy import duties.

What Is This Scheme?

The EPCG Scheme is a flagship initiative by the Directorate General of Foreign Trade (DGFT). It essentially allows businesses to import various types of capital goods – think machinery, equipment, and even software – that are crucial for pre-production, production, and post-production activities. The biggest perk? You get to import these goods without paying any customs duty, and in many cases, even IGST and Compensation Cess are exempted. This makes your products more competitive in the global market.

Who Can Benefit From This Scheme?

This scheme is designed for a wide range of entities involved in exports. This includes manufacturer exporters who produce goods themselves, merchant exporters who act as intermediaries, and even service providers who need quality equipment to deliver their services. The scheme also accommodates supporting manufacturers who help these exporters produce goods.

Why This Scheme Is Important

By removing the financial barrier of customs duty on essential capital goods, the EPCG Scheme plays a vital role in enhancing India's manufacturing capabilities and boosting our export performance. It helps businesses access the latest technology and machinery, leading to higher quality products and increased competitiveness on the international stage.

Objective

The EPCG Scheme aims to boost India's manufacturing and export competitiveness by allowing businesses to import capital goods needed for production at zero customs duty.

Benefits

Under the scheme, an interest-free loan of up to ₹1.00 lakh is provided for agricultural activities, up to ₹3.00 lakh for non-agricultural activities (such as animal husbandry, dairy, poultry, fisheries, cultivation of herbs, aromatic plants, spices, mushrooms, floriculture, horticulture, agricultural processing, farm mechanization, organic farming, off-season vegetable cultivation, poly-house farming, etc.), and up to ₹5.00 lakh for self-help groups (SHGs).

Sources and references

Guidelines (Page No. 188)

Eligibility Criteria

To apply for the EPCG Scheme, you need to meet the following pre-conditions:

You must have already imported items and paid customs duty for them.
You need to have an 'Active' Import Export Code (IEC) and be logged into the DGFT Customer Portal.
Your Digital Signature Certificate (DSC) must be enabled for submissions.
You should be authorised to draft and submit applications for your IEC.
Ensure your GSTN details are updated for all your branches on the DGFT portal. You can add or modify these under 'Services > IEC Profile Management > Modify IEC'.

How To Apply

The application process for the EPCG Scheme is primarily online through the DGFT portal. Here's a general outline:

Log in to the DGFT Customer Portal using your IEC and password.
Navigate to the EPCG Scheme application section.
Fill in all the required details accurately, including information about the capital goods you intend to import and your export plans.
Upload all the necessary documents as specified.
Submit the application form and pay the applicable application fees.
Your application will be reviewed by the DGFT authorities.

For the most up-to-date and detailed application procedure, including specific links and forms, please refer to the official DGFT website.

Documents Required

When applying for an EPCG authorisation, you'll generally need the following documents. Please note that specific requirements might vary for amendments, invalidations, or closures.

For Issuance of EPCG Authorisation:

Self-certified copy of your MSME/IEM/LOI/IL registration for product exporters, or Service Tax Registration for service providers. (If you're a service provider not registered with Service Tax, a declaration is needed, and RCMC from the concerned EPC will suffice).
A Certificate from a Chartered Engineer in the format specified in Appendix 5A.
A Certificate from a Chartered Accountant/Cost Accountant/Company Secretary in the format specified in Appendix 5 B.
If you're importing spares, tools, refractories, or catalysts for existing plant and machinery, you'll need a list of the already installed plant/machinery, certified by a Chartered Engineer or the jurisdictional Central Excise authority.
For EOU/SEZ units, a self-certified copy of the 'No Objection Certificate' from the Development Commissioner, detailing the capital goods imported/procured, their value, and depreciated value.

For Amendments:

A Certificate from a Chartered Engineer in the Appendix 5A format if you're making additions/deletions to import/export items.
If the capital goods to be imported or the item to be exported falls under the restricted category, a copy of clearance from the Exim Facilitation Committee (EFC) must be uploaded.

For Invalidation:

An EPCG Performa invoice of the Indigenous item intended to be invalidated.

For Closure:

TR-6 Challan for cases requiring regularization.
A Certificate from a Chartered Accountant in the format specified in Appendix 5C.

Official Sources:

For precise details and the latest formats, always refer to the official Foreign Trade Policy (FTP) and Handbook of Procedures (HBP) available on the DGFT website: www.dgft.gov.in

FAQ’s

What is the EPCG Scheme all about?

EPCG stands for Export Promotion Capital Goods. This scheme is designed to help boost India's exports by allowing businesses to import capital goods – the machinery and equipment needed for production – without paying any customs duty. It also provides exemptions from IGST and Compensation Cess in many cases. The main goal is to make Indian goods more competitive globally.

Who is eligible to apply for the EPCG authorisation?

The EPCG Scheme is open to manufacturer exporters (whether they work alone or with supporting manufacturers), merchant exporters who are linked to supporting manufacturers, and service providers. For the most current eligibility details, it's best to check the Foreign Trade Policy (FTP) and Handbook of Procedures (HBP).

What if my IEC status is 'DEL' or has been cancelled/suspended?

If your Import Export Code (IEC) is in 'DEL' (Default List), you can still start your EPCG application. However, your application will only be processed once your IEC is cleared from the 'DEL' status. If your IEC has been cancelled or suspended, you will not be able to apply for an EPCG authorisation.

How is the export obligation period structured?

The total export obligation period is six years, starting from the date your EPCG authorisation is issued. This period is split into two blocks: the first block covers the first four years, and the second block covers the remaining two years.

Can I make changes to an authorisation after it's issued?

Yes, you can request amendments to an issued authorisation, but only within its import validity period. No amendments are allowed once the import validity period has passed.

What does the initial and revised authorisation validity date signify?

The initial and revised validity dates on your authorisation show the import and export validity periods as per the original authorisation and any subsequent amendments. If no extensions or changes have been made, these dates will be the same.

Is there a fee for amending an authorisation?

Yes, there is a fee for amendments. It's calculated as one per thousand of the additional duty saved amount, plus a flat fee of INR 200/-. If you've already paid the maximum prescribed fee initially, no extra charges are needed for certain amendments.

Why can't I reduce the quantity of an imported item after it's been imported?

You can only reduce the quantity of imported items if the relevant import documents (bill of entries) are already recorded in the Shipping Bill Repository. This means once an item has been imported, you cannot reduce its declared quantity.

What are the advantages of sourcing goods domestically under this scheme?

If you choose to source your capital goods domestically, you might receive a benefit of 25% reduction in your specific Export Obligation.

What is an installation certificate and why is it needed?

An installation certificate is a crucial document that confirms the capital goods have been installed at the designated factory or premises of the authorisation holder or their supporting manufacturer. You can obtain this certificate from the jurisdictional customs authority or an independent chartered engineer.