What is EPCG
The Export Promotion Capital Goods (EPCG) scheme lets exporters bring in capital goods — plant, machinery, equipment and related spares — used in pre-production, production or post-production, at nil or concessional customs duty. In return, the authorisation holder takes on an export obligation: a commitment to export a multiple of the duty saved within a set time frame. It's a useful route for businesses looking to modernise or expand manufacturing capacity without the full upfront duty cost.
Who needs it
- Manufacturer exporters looking to import production machinery or equipment
- Merchant exporters who have a tie-up with a supporting manufacturer
- Service providers who need to import capital goods used in delivering exported services
Documents Required
- IEC (Import Export Code)
- RCMC from the relevant export promotion council
- Chartered Engineer certificate covering the machinery to be imported
- Proforma invoice from the equipment supplier
- Projected export and import figures for the block period
- GST returns of the applicant business
- Bank certificate confirming financial standing
Process
- File the application (Form ANF 5A) on the DGFT portal, with export obligation certified by a Chartered Accountant or Cost/Chartered Engineer.
- DGFT reviews the application and issues the EPCG Authorisation.
- Import the capital goods at concessional or nil duty against the Authorisation.
- Fulfil the export obligation — typically 6 times the duty saved, within 6 years from the date of Authorisation, in specified block periods.
- File the installation certificate for the imported machinery and submit periodic export obligation monitoring returns.
- Once the obligation is met, apply for the Export Obligation Discharge Certificate (EODC) to formally close the Authorisation.
FAQs
What's the export obligation under EPCG?
Generally, the holder must export 6 times the duty saved on the imported capital goods within 6 years of the Authorisation date, spread across specific block periods set by DGFT.
Can EPCG cover spares?
Yes. Spares, tools, jigs, fixtures, moulds and dies related to the capital goods already imported or to be imported can also be covered under the scheme.
What happens if the export obligation isn't met?
The duty saved on the unfulfilled portion becomes payable along with applicable interest, and penalties may also apply under the Foreign Trade Policy.
