DGFT Enhanced EPCG Scheme to Boost Efficiency and Competitiveness

Current Context: The Directorate General of Foreign Trade (DGFT) recently announced significant enhancements to the Export Promotion Capital Goods (EPCG) Scheme, aimed at simplifying processes, reducing transaction costs, and promoting automation to benefit exporters.

• Here are the key changes:
• Extended Period for Installation Certificates (ICs):
• Exporters now have an extended period of 3 years to submit Installation Certificates (ICs) for imported capital goods. Previously, ICs were required to be uploaded within 6 months from the date of import.
• In the case of import spares, the IC must be uploaded within 3 years from the date of import.
• The Registration Authority (RA) can further extend this period up to a valid Export Obligation (EO) period by paying a composition fee of Rs 10,000 per year.
• This extension eases pressure on businesses, allowing them to focus more on production and export activities.
• Simplified Composition Fee Structure for EO Extension:
• The scheme introduces a new simplified and reduced composition fee structure for extending the EO period.
• This change minimizes manual intervention, streamlines compliance, and speeds up service delivery.
• Uniform Composition Fees for EO Extensions and Regularization of Exports:
• The Policy Relaxation Committee (PRC) decisions regarding EO extensions and regularization of exports now have uniform composition fees:
• Rs 30,000 (for duty saved value of EPCG authorization issued up to Rs 2 crores)
• Rs 60,000 (for EPCG issued for more than Rs 2 crores to 10 crores)
• Rs 1 lakh (for EPCG issued above Rs 10 crores)
• Different Timelines for EO Period Extension:
• Requests for extension of EO period must be made within 6 months from the date of expiry of the 1st block-wise EO period.
• The composition fee varies based on the duty saved value of the EPCG authorization.

Question:

1 What is the composition fee for extending the Export Obligation (EO) period for EPCG authorizations with a duty saved value up to Rs 2 crores?

• A) Rs 10,000
• B) Rs 30,000
• C) Rs 60,000
• D) Rs 1 lakh

Answer: B) For EPCG authorization with a duty saved value of up to Rs 2 crores, the uniform composition fee for EO extensions and regularization of exports is Rs 30,000.