Amendments in Chapter 5 of the Handbook of Procedures 2015-20, related to Export Promotion Capital Goods Scheme to reduce 'Compliance Burden' and enhance 'Ease of doing Business' – reg.

(TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY PART-I SECTION-I) GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE DIRECTORATE GENERAL OF FOREIGN TRADE UDYOG BHAVAN PUBLIC NOTICE No. 03/ 2015-2020 NEW DELHL, DATED THE /3% April, 2022 Amendments in Chapter 5 of the Handbook of Procedures 2015-20, related to Subject: Export Promotion Capital Goods Scheme to reduce ‘Compliance Burden' and enhance 'Ease of doing Business’ — reg. In exercise of powers conferred under Paragraph 1.03 of the Foreign Trade Policy (FTP) 2015-2020, as amended from time to time, the Director General of Foreign Trade hereby makes the following amendments in Chapter 5 of the Handbook of Procedures (2015-20) with immediate effect. These amendments are applicable for EPCG authorizations issued under F°TP 2015-20. S. [Para (Existing provsion Revised provision No.|No. 1 [5.14 (5.14 Block-wise Fulfilment of EO 5.14 Block-wise Fulfilment of EO (c) (c) Request for extension of Export (c) Where EO of the first block is not Obligation period of first block shall be fulfilled in terms of the above submitted within 6 months from the date proportions, except in cases where the of expiry of first block EO period along EO prescribed for first block is with composition fee of 2% on duty saved extended by the Regional Authority amount proportionate to unfulfilled subject to payment of composition fee portion of EO pertaining to the block. RA of 2% on duty saved amount may consider the request for extension of proportionate to unfulfilled portion of block wise EO period, received after 6 EO pertaining to the block, the months, but within 6 years from date of Authorization holder shall, within 3 issue of authorization, with a late fee of months from the expiry of the block, Rs. 10,000/- per authorization. Application pay duties of customs (along with made beyond 6 years, for extension of applicable interest as notified by DOR) block-wise EO period for regularization proportionate to duty saved amount on purpose, shall also be considered by RA total unfulfilled EO of the first block. concerned, with an additional late fee of Rs. 5,000/- for each year per authorization. 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 Regional Authority, theAuthorization 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. 5.15 5.15 Monitoring of Export 5.15 Annual reporting of EO fulfillment Obligation Authorisation holders shall submit to the Authorisation holders shall submit to RA concerned by 30th June of every year, RA concerned by 30th April of every a report on fulfillment of export year, report on fulfillment of export obligation through online. Such a report obligation by secured electronic filing shall contain details such as Shipping using digital signatures/ or hard copy bill/GST invoice number, date of thereof. export/supply, description of product exported/supplied and FOB/FOR value of export/supply for both specific as well as average export obligation. Any delay in filing such an annual report shall be regularised on payment of Rs. 5000/- late fees for each financial year per authorisation. 5.16 5.16 Automatic Reduction/ |5.16 Automatic Reduction (a) Enhancement upto 10% Duty saved [Enhancement upto 10% Duty saved amount and pro rata Reduction/ amount and pro rata Reduction Enhancement in export Enhancement in export obligation obligation (a) in excess of the duty saved amount (a) in excess of the duty saved indicated on the authorization by not more amount indicated on the authorization than 10%, the authorization shall be by not more than 10%, the deemed to have been enhanced by that authorization shall be deemed to have proportion. Customs shall automatically been enhanced by that proportion. allow clearance of such goods without Customs shall automatically allow endorsement by RA _ concerned. The clearance of such goods without authorization holder shall furnish endorsement by RA concerned. The additional fee to cover excess imports authorization holder shall furnish affected, in terms of duty saved amount, additional fee to cover excess imports to RA concerned, at the time of effected, in terms of duty saved application for EODC. Export obligation amount, to RA concerned, within one shall automatically stand enhanced month of excess imports taking place. proportionately. Export obligation shall automatically stand enhanced proportionately. RA concerned may also accept the additional fee to cover the excess imports effected, in terms of duty saved amount, if the same is furnished beyond one month but within two years of the excess import taking place, subject to payment of acomposition fee of Rs. 5000/- per authorisation. 5.17(d) 5.17 Extension in Export Obligation 5.17 Extension in Export Obligation Period. Period. (d) Request for extension in EO Period (d) Request for extension in EO Period shall be made to RA concerned within 6 shall be made to RA within 90 day s months from the date of expiry of original from the date of expiry of original EO EO Period. However, RA may consider Period. However, RA may consider the the request for extension received after 6 request for extension received up to 180 months, but within 8 years from date of days with additional composition fee off issue of authorization, with a late fee of Rs. 5,000. Rs. 10,000/-. Application made beyond 8 years, for extension of EO period from 6 to 8 years for regularization purpose, shall also be considered by RA concerned, with an additional late fee of Rs. 5,000/- for each year per authorization. This fee is in addition to the composition fee that may be payable on account of shortfall in export obligation. However, EO extension, beyond 8 years from date of issue of authorisation, shall not be allowed by RA under this provision. 5.19 A 5.19A Maintenance of Annual 5.19A - Maintenance of Annual Average Average Export Obligation Export Obligation The excess exports done towards the average export obligation fulfillment The excess exports done towards the of an EPCG authorization during a average export obligation fulfillment of an year can be used to offset any EPCG authorization during a year can be shortfall in the Average EO done in used to offset any shortfall in the Average other year(s) of the EO period or the EO done in other year(s) of the EO period block period as the case may be or the block period as the case may be, provided Average EO imposed is provided Average EO imposed is maintained on an overall basis, maintained on an overall basis, within the within the block period or the EO EO period. period as applicable. 5.22 5.22 Redemption 5.22 Export Obligation Discharge Certificate (EODC) (a) & (a) Authorisation holder shall apply (b) for redemption in ANF 5B with documents prescribed therein as a (a) Authorisation holder shall apply for proof of EO fulfillment. EODC in ANF 5B. with documents prescribed therein as a proof of EO (b) On being satisfied, RA concerned fulfillment. shall issue a certificate of discharge of export obligation to the EPCG (b) On being satisfied, RA concerned authorisation holder and forward a shall issue EODC to the EPCG copy to Customs Authorities with authorisation holder and a copy of which whom BG/LUT has been executed. A will be forwarded to ICEGATE through yostatement giving details of the documents submitted by the authorisation holder towards evidence of EO fulfillment shall also be enclosed with the certificate. EODC will be forwarded online to ICEGATE for further action by Jurisdictional Customs Authorities with whom BG/LUT has been executed. 7 5.23 (|5.23 Regularization of Bonafide |5.23 Regularization of Bonafide Default (a) Default and Exit from EPCG and Exit from EPCG Scheme S (ac )h Ie nm ce ase, EPCG authoriosoa.ti on holder SeI to fulfi_l EvPeCscGri beda ustheopriosartito n oblighaotlidon, fails to fulfill prescribed export P P ° Ihe shall pay Customs Duty/taxes/Cess obligation, he shall pay Customs Duty along with applicable interest as along with applicable interest as prescribed by Customs Authority. Such prescribed by Customs Authority. facility can also be availed by EPCG Such facility can also be availed by authorisation holder to exit at his option. EPCG authorisation holder to exit at his option. The authorisation holder will have the option to furnish valid duty credit scrips, issued under Chapter 3 or Chapter 5 of FTP, for payment of the Customs duty component. E cf of me pc lt i ao nf c et hi bs u rP du eb nl ,i c c erN to at ii nc e p: r oW vi it sh io na s vi ofe w C ht ao pe tn eh ra n 5 ce re le aa ts ee d o tf o d to hi en g E xb pu os ri tn e Ps rs o ma on td i r oe nd u Cc ae p it th ae l Goods Scheme of the Handbook of Procedures (2015-20) are amended for EPCG authorizations issued under Foreign Trade Policy (201 5-20). Bee \>" (Santosh Kumar Sarangi) Director General of Foreign Trade & Ex-officio Additional Secretary, Government of India Email: dgft@nic.in [Issued from File No. 18/79/AM-21/P-5]