Export Promotion Capital Goods (EPCG) Scheme

The Export Promotion Capital Goods (EPCG) Scheme allows you to import capital goods at zero customs duty. You can use this scheme to upgrade your production facilities with modern machinery. The scheme covers manufacturer exporters, merchant exporters, and service providers. Capital goods include machinery, equipment, computer systems, software, spares, moulds, dies, and testing instruments. You must fulfil an export obligation of six times the duty saved. This obligation period spans six years from your licence issuance date. The EPCG scheme ensures duty benefits contribute to India's export growth. You can upgrade production facilities with advanced technology at minimal cost.

• Zero Customs Duty: You import capital goods at zero percent customs duty. This reduces your initial capital investment significantly.

• Domestic Sourcing Option: You can buy capital goods from domestic markets with deemed export benefits. Your export obligation reduces by 25 percent. You also get GST exemption on domestic purchases.

• Flexible Repayment: You fulfil export obligations over six years. This gives you adequate time for production setup and market development.

• Technology Access: You gain access to modern machinery and equipment. This helps you improve product quality for international markets.

• Extension Options: You can request export obligation extensions within six months of expiry. Late applications attract a fee of ₹10,000 per authorisation.

• No Bank Guarantee: You need only a bond when shipments are under ₹1 crore. This eases your financial burden considerably.

• Wide Coverage: The EPCG scheme covers hotels, hospitals, software companies, and logistics providers.

• You must hold a valid Import Export Code (IEC) from DGFT.

• You need registered exporter status as manufacturer, merchant, or service provider.

• Your export turnover should be minimum ₹1 crore in the previous year.

• You must not appear on DGFT's Negative List or RBI's caution list.

• You need proof of manufacturing capacity through MSME registration or Udyog Aadhar.

• You must have remaining export obligation equivalent to duty on imported goods.

• You need a valid Registration-cum-Membership Certificate (RCMC) from Export Promotion Council.

1.Register on DGFT Portal

Visit https://www.dgft.gov.in and register as a new user. Login using your DGFT Digital Signature Certificate. Manual applications are not accepted for this scheme.

2.Access Application Module

Click the "Services" tab on the DGFT dashboard. Select "Online e-COM Application" option. Choose "EPCG (0%)" from available schemes.

3.Fill Application Details

Enter your port of registration for imported machinery. Select exporter type and product group code. Fill CIF value in rupees and US dollars.

4.Add Registration Details

Complete industrial registration by selecting registration type. Enter registration number and date of issue. Upload factory address matching your manufacturing licence.

5.Specify Product Details

Enter export items you will manufacture using imported goods. Provide capital goods details including specifications and quantity. Ensure details match your purchase order exactly.

6.Upload Documents

Attach IEC, RCMC, industrial certificates, and GST certificate. Upload proforma invoice and Chartered Engineer Certificate. Include Chartered Accountant Certificate and supporting documents.

7.Pay and Submit

Pay application fees equivalent to 0.1 percent of duty saved. Review all information carefully before submission. The licence is issued within three days after approval.

8.Register at Customs

Submit licence copy to Customs at import port. Provide bonds and supporting documents. This registration enables duty exemptions on imported goods.

The export promotion capital goods scheme empowers you to modernise production capabilities. You import capital goods at zero duty, reducing the need for a substantial business loan to cover upfront taxes.. The scheme offers flexible timelines and domestic sourcing options. This makes the EPCG scheme advantageous for exporters committed to international trade.

Business Loans on Bajaj Markets can support your EPCG plans by funding machinery, working capital, and expansion, so you can meet export obligations without straining cash flow.