PortMatrix

Duty free import of Capital Goods

Export Promotion Capital Goods (EPCG) Scheme

The EPCG Scheme facilitates import of capital goods at zero customs duty and other taxes, for producing quality goods and services that enhance India's manufacturing competitiveness and boost export capability.

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What the scheme is

The Export Promotion Capital Goods (EPCG) Scheme is a foreign trade incentive scheme under India's Foreign Trade Policy (FTP). It allows import of capital goods at zero customs duty for producing goods or services meant for export.

How PORTMATRIX helps

PORTMATRIX facilitates exporters to avail EPCG License.

Example: how the export obligation is worked out

A company imports a machine worth ₹1 crore under EPCG and saves ₹7.50 lakh duty.

The company must achieve 6 times the amount of duty saved, in a period of next 6 years.

Export Obligation is: ₹7.50 lakh × 6 times = ₹45 lakh.

Who can use it

The scheme is applicable for:

  • Manufacturers
  • Exporters
  • Service providers

What it covers

Import of capital goods at concessional/zero customs duty

Supports:

  • Machinery
  • Equipment
  • Spares
  • Tools
  • Computer systems

Export obligation and objective

Export obligation must be fulfilled within a specified period (usually 6 years + 2 years extensions may be provided).

Objective: To help Indian exporters modernize technology and improve export competitiveness by reducing the cost of importing machinery and equipment.

Benefits

  • Reduces machinery import cost
  • Improves manufacturing capability
  • Encourages exports
  • Enhances global competitiveness
  • Helps technology upgradation

Related authorities

  • Directorate General of Foreign Trade
  • Central Board of Indirect Taxes and Customs

From authorization to closure

  1. Apply for EPCG Authorization with the guidance of PORTMATRIX

  2. Import Capital Goods at Zero Duty

  3. Install & Use Machinery

  4. Manufacture Goods / Provide Services

  5. Export Products or Services

  6. Fulfill Export Obligation

  7. Submit Documents to DGFT & Customs

  8. EPCG Authorization Closed

Frequently asked questions

What can be imported under the EPCG Scheme?
Capital goods at concessional/zero customs duty, for producing goods or services meant for export. The scheme supports machinery, equipment, spares, tools and computer systems.
Who can use the EPCG Scheme?
The scheme is applicable for manufacturers, exporters and service providers.
What is the export obligation period?
Export obligation must be fulfilled within a specified period, usually 6 years, and 2 years of extensions may be provided.
How is the export obligation calculated?
In the source's example, a company imports a machine worth ₹1 crore and saves ₹7.50 lakh duty. It must achieve 6 times the duty saved over the next 6 years: ₹7.50 lakh × 6 times = ₹45 lakh.

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