Executive Summary:
This Public Notice from the Directorate General of Foreign Trade announces new Appendices 5E and 5F to the Foreign Trade Policy (FTP) 2015-2020. Appendix 5E details the computation of the Annual Average Export Obligation under the EPCG Scheme. Appendix 5F lists capital goods that are either not permitted or permitted with specific conditions for import under the EPCG Scheme.
Key Points / Main Content:
* **Appendix 5E: Computation of Annual Average Export Obligation under EPCG Scheme**
* For EPCG authorizations issued during a licensing year, the Average Export Obligation will be the same for same and similar products.
* When calculating Average Export Obligation, exports counted for fulfilling specific Export Obligations against EPCG Authorizations within the valid EO Period whether original or extended that have been made in the preceding 3 years will not be considered.
* If an applicant has been in existence for more than 3 years, the exports in each of the past 3 years even if for some years, it may be zero are aggregated and the aggregate export is divided by 3.
* If an applicant has been in existence for less than 3 years, the denominator in the above calculation will be the number of years and not 3.
* **Appendix 5F: List of Capital Goods Not Permitted/Permitted Subject to Specific Conditions for Import under EPCG Scheme**
* Cables are permitted only as an integral part of Capital Goods.
* Railway wagons excluding specialized wagons, tractors, motor cars, sports utility vehicles, all-purpose vehicles, airport ground handling equipment, all second-hand capital goods are not permitted.
* Furniture, carpets, crockery, marble, chandelier, tiles, flooring, doors for rooms, fixing panels are permitted only to the Hotel Industry.
* Construction equipment viz. Cranes etc. are permitted only for providing services.
* All construction material like sheds, cement, steel and computers and printers are not permitted.
* Trucks, Tippers, Dumpers and spares thereof are permitted only to the mining sector, including tires.
* Capital Goods including Captive plants and Power Generator Sets of any kind are not permitted for export of electrical energy/power; Supply of electrical energy/power under Chapter 7; Supply of power/energy in their own unit, and Supply/export of electricity transmission services.
Impact Analysis:
* **Exporters:**
* Impact: Changes in the calculation of average export obligation and the list of restricted/permitted capital goods will directly impact exporters using the EPCG scheme.
* Action Required: Review Appendix 5E to understand the new calculation methodology for average export obligation. Review Appendix 5F to check if any planned or existing capital goods imports are affected.
* **EPCG Authorization Holders:**
* Impact: The new rules may affect their ability to meet export obligations and import certain capital goods under the scheme.
* Action Required: Assess the impact of the changes on current and future EPCG authorizations and adjust import plans accordingly.
* **Hotel Industry:**
* Impact: Specified items such as furniture, carpets, crockery, marble, chandelier, tiles, flooring, doors for rooms, fixing panels are permitted only to the Hotel Industry.
* Action Required: Adhere to guidelines when importing.
* **Mining Sector:**
* Impact: Trucks, Tippers, Dumpers and spares thereof are permitted only to the mining sector, including tires.
* Action Required: Adhere to guidelines when importing.
Key Entities Referenced
Foreign Trade Policy, 2015-2020: A policy document governing import and export regulations and guidelines.
Director General of Foreign Trade: The issuing authority for the public notice, responsible for foreign trade regulations.
EPCG Scheme: Export Promotion Capital Goods Scheme, a scheme under the Foreign Trade Policy to facilitate import of capital goods for export production.
New Delhi: Location where the public notice was issued.
Appendix 5E: Appendix 5E of FTP 2015-20, relates to the computation of annual average export obligation under the EPCG Scheme.
Appendix 5F: Appendix 5F of FTP 2015-20, contains list of capital goods not permitted/permitted subject to specific conditions for import under EPCG Scheme.
HBP 2015-20: Handbook of Procedures 2015-20, a document related to the Foreign Trade Policy.
Ministry of Commerce and Industry: The government ministry responsible for foreign trade and commerce-related policies.
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MINISTRY OF COMMERCE AND INDUSTRY
(Department of Commerce)
(DIRECTORATE GENERAL OF FOREIGN TRADE)
PUBLIC NOTICE
New Delhi, 6th December, 2017
No. 47 /2015-2020
F. No. 18/03/AM-15/P-5.—In exercise of powers conferred under Paragraph 1.03 of the Foreign Trade Policy,
2015-2020, the Director General of Foreign Trade hereby notifies new Appendices 5 E (Computation of Annual
Average Export Obligation under EPCG Scheme) and 5 F (List of Capital Goods not permitted/ permitted subject to
specific conditions for import under EPCG Scheme) of FTP 2015-20, as contained in Annexure to this Public Notice.
Effect of this Public Notice: New Appendices 5 E and 5 F of FTP 2015-20, are being notified.
ALOK VARDHAN CHATURVEDI, Director General of Foreign Trade
APPENDIX - 5 E
COMPUTATION OF ANNUAL AVERAGE EXPORT OBLIGATION UNDER EPCG SCHEME
(PARA 5.04 (b) OF FOREIGN TRADE POLICY 2015-20 READ WITH PARA 5.12 OF HBP 2015-20).
The average Export Obligation under EPCG scheme shall be fixed as under:
(i) In respect of EPCG authorizations issued to an applicant during a licensing year, the Average Export
Obligation will be same for same and similar products. While calculating Average Export Obligation,
exports counted/being counted for fulfilling specific EO against EPCG Authorisations within valid EO
Period (whether original or extended) that have been made in the preceding 3 years will not be taken into
account.
(ii) If an applicant has been in existence for more than 3 years, the exports in each of the past 3 years (even
if for some years, it may be zero) are aggregated and the aggregate export is divided by 3.
(iii) If an applicant has been in existence for less than 3 years, the denominator in the above calculation will
be the number of year and not 3. The following table illustrates the fixation of average Export Obligation
(in case a firm/company has applied for EPCG authorizations in the year 2017-18).
Firm/Company in existence for more than 1 year but less than 2 years
Year 1 (2016-17) Year 2 (2015-2016) Average Export
Obligation
Exports Nil Not Applicable Nil
X Not Applicable X/1
Firm/Company in existence for more than 2 year but less than 3 years
Year 1 (2016-17) Year 2 (2015-2016) Average Export
Obligation
Exports Nil Nil Nil
Nil X X/2
X Y X+Y/2
APPENDIX- 5F4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
LIST OF CAPITAL GOODS NOT PERMITTED / PERMITTED FOR IMPORT SUBJECT TO SPECIFIC
CONDITIONS UNDER THE EPCG SCHEME
(PLEASE SEE PARA 5.01 OF FTP 2015-20)
Sr. No. Name of Item Importability under EPCG Scheme
1. Cables Permitted only as an integral part of Capital
Goods.
2. Railway wagons (excluding specialized wagons) Not permitted
3. Tractors Not permitted.
4. Trucks / Tippers / Dumpers and spares thereof Permitted only to mining sector.
including tyres.
5. Motor Cars, Sports utility Vehicle / All purpose Not permitted.
vehicles
6. Airport Ground Handling Equipments Not permitted.
7. Furniture, carpets, crockery, marble, chandelier, Permitted only to Hotel Industry.
tiles, flooring, doors for rooms, fixing panels.
8. Construction equipments viz. Cranes etc. Permitted only for providing services.
9. All construction material like sheds, cement, steel. Not permitted.
10. Computers and printers Not permitted.
11 All Second Hand Capital Goods Not permitted.
12. Capital Goods (including Captive plants and Power Not permitted
Generator Sets of any kind) for export of electrical
energy (power); Supply of electrical energy (power)
under Chapter 7; Supply of power (energy) in their
own unit, and Supply/export of electricity
transmission services.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.