Lok Sabha Question No. 86 (UNSTARRED), answered on 2019-02-04
Subject: Export Promotion Capital Goods Scheme
Ministry: COMMERCE AND INDUSTRY
Asked by: GAJANAN CHANDRAKANT KIRTIKAR, S. RAJENDRAN, T. RADHAKRISHNAN, KUNWAR HARIBANSH SINGH, VIJAY KUMAR S.R., SUDHEER GUPTA

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 86 TO BE ANSWERED ON  04 th  FEBRUARY, 2019

## EXPORT PROMOTION CAPITAL GOODS SCHEME

## 86. SHRI GAJANAN KIRTIKAR:

SHRI S. RAJENDRAN:

SHRI T. RADHAKRISHNAN:

KUNWAR HARIBANSH SINGH:

SHRI S.R. VIJAYAKUMAR:

SHRI SUDHEER GUPTA

Will the Minister of COMMERCE & INDUSTRY ( वा ͨणÏय एवं उɮयोग मंğी ) be pleased to state:

- (a) whether  the  Government  has  implemented  the  Export  Promotion  Capital  Goods Scheme for boosting the export of capital goods;
- (b) if  so,  the  details  thereof  along  with  the  requirements  which  are  required  to  be fulfilled by the exporters for running the said scheme;
- (c) the details of the benefits available for the exporters under this scheme;
- (d) whether there have been instances where the exporters have availed the benefits of the  said  scheme  without  fulfilling  the  mandatory  requirements  under  the  scheme; and
- (e) if so, the details of such defaulters during each of the last three years and the action taken by the Government in this regard?

## ANSWER

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THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI C. R. CHAUDHARY)

- (a) to (c): Yes,  Madam.  In  order  to  facilitate  import  of  capital  goods  for  producing quality goods and services and enhance India's manufacturing competitiveness,  the  Central  Government  has  been  implementing  a  Scheme called the Export Promotion Capital Goods Scheme under the Foreign Trade Policy for manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers.

Under the Scheme, EPCG Authorisations are issued with actual user condition and  import  validity  of  24  months  to  import  capital  goods  (except  those specified in negative list) for pre-production, production and post-production at zero customs duty, and subject to fulfilment of specific Export Obligation equivalent to 6 times of duties, taxes and cess saved on capital goods, to be fulfilled  in  6  years  from  date  of  issue  of  Authorisation.  In  addition,  the Authorisation holder is required to fulfil Average Export Obligation achieved by  him  in  the  preceding  three  licensing  years  for  the  same  and  similar products. However, if minimum 75% of specific Export Obligation and 100% of  Average  Export  Obligation  is  fulfilled  within  half  the  original  export obligation  period,  remaining  export  obligation  can  be  condoned.  Further,  in case  of  indigenous  sourcing  of  capital  goods  and  for  exports  of  Green Technology  products,  specific  EO  is  only  75%.  For  Units  located  in  North East  Region  and  Jammu  &  Kashmir,  specific  EO  is  only  25%.  Presently, capital goods imported for physical exports are also exempt from IGST and Compensation Cess up to 31.03.2019.

- (d) & (e) Yes, Madam. The number of defaulters reported in the last three years is 1347 nos.  in  2015-16;  1122  nos.  in  2016-17  and  1031  nos.  in  2017-18.  The Regional  Authorities  have  taken  penal action  under  the  Foreign  Trade (Development  &  regulation  Act),  1992  by  issuing  show  cause  notices  and passing adjudication orders for recovery of customs duty along with interest.

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