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Best Advance Authorisation License Consultants in India

EPCG Service Provider in Mumbai, Pune, Delhi, Bengaluru, Chennai, Ahmedabad, and other parts of India

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      What is Advance Authorisation License?

      The EPCG (Export Promotion Capital Goods) scheme is an export incentive program implemented by The Directorate General of Foreign Trade (DGFT) to promote exports. Under this scheme, eligible exporters can import capital goods, including spares, tools, and accessories, duty-free subject to an export obligation. This scheme helps the manufacturer exporters to reduce their production costs thereby making them more competitive in the global market.

      In return for availing the benefits of the EPCG scheme, the exporter is required to fulfill specific export obligations relating to meeting certain level of export performance within a certain timer period.

      One of the major objectives of EPCG scheme is to facilitate the import of capital goods required for modernization, and upgradation of production sector in India.

      What is eligible to be imported under EPCG Scheme?

      The items necessary for producing goods or providing services, which may include machinery, equipment, accessories, or plants. These items may be required for direct or indirect use in manufacturing or production, as well as for expansion, technological upgrades, modernization, or replacement purposes.

      Refrigeration equipment

      Catalysts for initial charge

      Computer software systems

      Capital goods used in manufacturing, mining, agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture and viticulture as well as those used in services sector.

      Power generation sets

      Packaging machinery and equipment

      Spares, moulds, dies, jigs, fixtures

      Equipment and instruments for testing, research and development, quality and pollution control.

      Machine tools

      Refractories for initial lining

      Catalysts for initial charge plus one subsequent charge

      Who are eligible for EPCG Scheme?

      Manufacturer Exporters
      • Any Manufacturer exporter can benefit from EPCG Scheme by opting for a EPCG License and importing machinery with zero customs duty and zero IGST.
      • Manufacturer exporters with supporting manufacturers can also apply for EPCG License for importing duty free machinery and install it in their supporting manufacturer's premises,
      Merchant Exporters
      • Merchant exporter can also apply for EPCG License by endorsing the name of the supporting manufacturer in the License. In this case, the imported machinery will be installed in the supporting manufacturer's premises. 
      Service Exporters
      • Service exporters including restaurants, hotels, legal service providers, IT service providers, Architectural service providers, etc. can import capital goods/machinery under EPCG Scheme and fulfill export obligation by foreign exchange earned by exporting their respective services. 

      Step-by-Step Procedure of obtaining EPCG License and How can we help you in each stage?

      Stage 1 - Advisory

      The Process:

      • The process of obtaining an EPCG (Export Promotion Capital Goods) license can indeed be a complicated and lengthy procedure that requires careful analysis and decision-making from multiple stakeholders. Since, EPCG license comes with an export obligation that has to be fulfilled by maintaining a particular export performance for a period of six years, an exporter has to make an informed decison whether his predicted export performance will fulfill the export obligation.

      How do we help you?

      • We, as EPCG Consultants review the application and conduct a thorough analysis of the exporter's financial standing, export performance, and the potential for export growth and advice on the feasibility of EPCG License. 

      Stage 2 - Documentation

      The Process:

      • EPCG scheme involves a lot of documentation and formalities that can be time-consuming and confusing and challenging to importers. Before importing machinery, a thorough research has to be done on the ITC HS Code classification of the machinery, Import Policy of the machinery, Customs Duties on the import of the machinery, including other procedures. After understanding the trade dynamics of the machinery, Chartered Engineer certificate has to be obtained to ensure that the machinery is to be imported only for a specific mentioned purpose. Other documents including Machinery Catalogue/Brochure, Invoice, Bill of Lading, Packing list, Purchase Order, Industrial License (IEM, MSME) other declarations and undertakings are also mandatory for obtaining EPCG License.

      How do we help you?

      • We, at A V International offer an end-to-end documentation service that includes ITC HS Code Classification, Calculating Duties on the capital goods, Checking for free trade agreements, and obtaining other requisite documents. To obtain EPCG License, Chartered Engineer Certificate is a must, and the same is to be obtained by the exporter for which we provide our assistance & guidance. Additionally, we prepare company specific formats of declarations & undertakings, obtain MSME or IEM on behalf of our clients and arrange the rest of the documents. After obtaining the documents, we make sure that the documents are organised, filed and duplicated for record purpose and scan copies of the same are stored safely in our systems. 

      Stage 3 - Online Application,Follow-ups and Obtaining the EPCG License

      The Process:

      • The prepared documentation has to be then submitted with the DGFT Regional Authority (RA). Regular follow-ups are to be maintained with the DGFT officer to fast track the file so that the file gets priority treatment and is processed faster.  

      How do we help you?

      • As a part of our one-stop EPCG Solution, we complete the documentation procedure and make a full-proof file and submit with the DGFT regional Authority (RA). We maintain regular and robust follow-ups with the DGFT officer and ensure that the applications of our clients get processed on priority. We make sure that the DGFT license is issued even before the agreed timeline.

      Stage 4 - Registration of License at Customs

      The Process:

      • The EPCG License thereby obtained has to be registered at the customs port where the machinery is to be imported by executing a bond in lieu of customs duty. The bond has to be executed saying that the machinery will be imported under EPCG license within the stipulated timeline before the expiry of the license. Bank Guarantee may be required for submission in some cases.

      How do we help you?

      • As EPCG Consultants, we inform our clients beforehand about the documentation required for registration of license at customs and whether Bank Guarantee will be required for the client. We represent our clients at the customs port and register the license as soon as possible. If need be, we assist our clients with our guidance for executing Bond or requisite Bank Guarantee to register the license at the customs port.

      Stage 5 - Machinery Import

      The Process:

      • After EPCG License is registered at customs, the requisite machinery has to be imported within two years. If the machinery is not imported within the stipulated time, the EPCG license expires and cannot be extended further. If the EPCG License expires, then Customs Duty and IGST has to be paid on the import of the machinery.  In addition, there are certain measures to be taken while filing the Bill of Entry to ensure EPCG Compliance and avoid payment of Customs Duty and IGST.

      How do we help you?

      • We track the EPCG License timeline and keep the client informed about the expiry date of the license. Additionally, we help the client to ensure that necessary measures are taken at the time of filing Bill of Entry while importing the requisite machinery to ensure EPCG Compliance and avoid payment of Customs Duty and IGST.

      Stage 6 - Installation of Machinery and Installation Certificate

      The Process:

      • After the machinery is imported, the machinery should be installed immediately at the declared location and installation certificate has to be issued and submitted with the DGFT Regional Authority (DA) within 6 months from the import date. A penalty is imposed on the exporter, in case the installation certificate is not submitted within the stipulated timeline.

      How do we help you?

      • We make sure that correct address of the location where the machinery is installed is mentioned on the EPCG License. We track the timeline of the license and keep the exporter informed about the penalties that will be incurred on the delay of installation. In addition, we provide assistance in obtaining Installatiion Certificate from a designated Chartered Engineer from our network or from the GST Department and submit the same with DGFT in time.   

      Stage 7 - Export Obligation (EO) Fulfillment

      The Process:

      • After the machinery is successfully installed in the factory premises of the exporter, an exporter has to fulfill a Specific Export Obligation (SEO) by exporting products having FOB value of six times the duty saved value of the machine in a timeframe of six years. Additionally, the exporter fulfill Average Export Obligation by maintaining the same level of Export Performance in each financial year, which was maintained by the company in the preceding three financial years before the EPCG license was issued. It is to be noted that the DGFT awards exporters with certain concessions on Export Obligation noticing efforts towards early EO fulfillment and maintaining 100% Average Export Obligation. One of the most important part of EPCG is that the exporter should make sure that the shipping bills are formatted in a particular way so that these shipping bills are identified towards EO fulfillment.

      How do we help you?

      • We make sure that the exporter is informed about the Export Obligation Period that includes the Specific Export Obligation and Average Export Obligation entitled to the exporter with the EPCG License. Additionally, we ensure that the exporter is well informed about the concessional benefits on efforts of early EO Fulfillment. We help the exporter in formatting the shipping bills such that they are EPCG Compliant and are counted towards EO Fulfillment. We also help our clients in extension of Export Obligation Period (EOP) in case the EO is not fulfilled within the stipulated timeline.

      Stage 8 - Redemption of EPCG License and obtaining Export Obligation Discharge Certificate (EODC)

      The Process:

      • After the export obligation is fulfilled, the EPCG License has to be redeemed at the DGFT Regional Authority (RA). Redemption of EPCG license is a pivotal stage of the EPCG process and can pose a severe challenge during closure at the DGFT Regional Authority (RA) office.

      How do we help you?

      • As a part of our end-to-end EPCG Consulting Service, we ensure that we prepare the essential set of documents required for Redemption of EPCG License at the DGFT Regional Authority (RA) office, processing the documents internally to make certain that formatting is proper, submit the same for processing with the DGFT RA, follow-up with officers to fast-tracking the case to get the priority treatment and finally redeeming the license from the DGFT by obtaining Export Obligation Discharge Certificate. 

      Stage 9 - Bond / Bank Guarantee (BG) Cancellation at Customs

      The Process:

      • Bond / Bank Guarantee (BG) Cancellation is the final stage of the EPCG process which has to be done at Customs where the license is registered after obtaining Export Obligation discharge Certificate (EODC).

      How do we help you?

      • As EPCG Consultants we represent our clients at the customs port where the license is register and cancel the Bond or Bank Guarantee by submitting all the necessary documents and maintaining regular follow-ups with the customs officers 
      Day 1:
      • Collection of required information
      • Classification of Trademark Class
      • Checking availability of Trademark
      Day 3:
      • Filing of online Trademark Registration application
      • Sharing the filed application & receipt
      Day 2:
      • Preparing the required documentation
      Day 4:
      • Government processing time
      Frequently Asked Questions

      All you need to know before applying for EPCG Scheme:

      In EPCG Scheme, the exporter can import capital goods duty free i.e. Zero custom duty and one has to export finished goods worth 6 times of the actual duty saved value in 6 years. The main goal of the EPCG Scheme is to improve India’s competitiveness in the manufacturing sector.

      The duty free authorization issued by DGFT RA is called EPCG License. It is Non-transferable license. It is used to import duty free capital goods.

      Zero duty EPCG Scheme allows import of capital goods for pre-production, post production and production at zero customs duty, subject to an export obligation equivalent to 6 times of actual imported duty-saved value in 6 years.

      In order to obtain an EPCG License from DGFT, the primary requirement is to file an online application with the RA of DGFT with DSC. While applying online application all the necessary documents are required to be uploaded. We have an experience team who can help you in applying for EPCG License.

      Maintenance of Average Export Obligation is a major problem in EPCG Cases which we come across regularly. Therefore If the Company is sure to achieve stable export orders in the years to come, then the EPCG Scheme is a very good option for them.

      Yes, the Average Export Obligation imposed in such cases will be zero.

      This scheme is beneficial for those Exporters who intend to pay all the duties in cash at the time of Import and after fulfilling an Export Obligation, then claim the benefit of duty-free in the form of Duty Credit Scrips.

      On receiving the EPCG License from DGFT the next step would be to register the license at Customs. It is not possible to clear the machinery duty-free unless you register the license at the port where the consignment will arrive. License is registered to the port of customs as mentioned in the license.

      Yes, it is mandatory to register EPCG License at customs.

      Yes, we can amend the EPCG License and below are the details-

      • If the Authorization holder has received the license but wanted to procure indigenously, the holder can amend the license and take an invalidation letter.
      • Due to changes in contract or increase in the value of imported capital goods, there will be a change in CIF value so we can amend the license.
      • Some time we are unable to import due to some or the other problem and the validity of import is going to expire so we can apply for revalidation of license.
      • Sometimes we want to add a new export product in the EPCG License due to some or the other reason. In such cases also, an EPCG license can be amended and new export products can be added.

      The following details should be mentioned in the shipping Bill to be counted in EPCG Scheme,

      1. EPCG License No. Should be mentioned in the shipping bill,
      2. Export Product with ITC HS code mentioned in the shipping bill should be the same as on License.

      Yes, Capital Goods/ machinery can be obtained from Domestic Suppliers with the help of an Invalidation Letter.

      1. Benefit to Domestic Supplier – he can claim the benefits of Deemed Exports against such supplies.
      2. Benefit to EPCG Authorization Holder – Specific Export Obligation will be decreased by 25% and such supplies will not attract GST until 31.03.2021. (Date may be extended from time to time).

      Yes, we can calculate the shipping consisting of Advance Authorization/Duty Drawback/DFIA/MEIS No. to be counted in EO fulfillment only if EPCG license no. is mentioned. It means that the EPCG Scheme can be combined with any other export promotion scheme.

      After obtaining an EPCG license from DGFT, it has to be registered at Customs. Once capital goods is cleared duty-free from Customs, it has to be installed at the said factory premises. An Installation Certificate has to be obtained from the Independent Chartered Engineer or Customs authority as a proof of Installation & commissioning. Once production starts, applicant should complete the export obligation in given time frame and submit all the export documents to DGFT office to close the EPCG license.

      An EPCG Authorization holder needs to install the capital goods imported within a period of six months in front of an Independent Chartered Engineer. The chartered engineer will check that as per the authorization capital goods have been installed in given factory / supporting manufacturer premises or not and also cross verify the capital goods imported details with the license. And as per the verification, he will generate a certificate mentioning company name, Imported capital goods with quantity, BOE details, capital goods installation date on his letterhead with signed and stamped. The certificate generated by an Independent Chartered engineer is called the Installation Certificate. The same original copy should be submitted in DGFT and customs and receive the acknowledgment for the same.

      Export Obligation is a task/job given by the DGFT to the applicant to export certain value of goods in certain time frame. Export obligation is mandatory to be fulfilled.

      No, in the current Foreign Trade Policy 2015-21, there is no provision to fulfill export obligation through alternate products. Export Obligation will be completed only with those finished goods produced from imported capital goods mentioned in the EPCG License.

      Yes, Deemed export is counted towards fulfillment of Export Obligation under EPCG Scheme. Supply to EOU/STP/EHTP/BTP Unit is called as deemed export and can be counted towards EO Fulfillment along with supply to SEZ units.

      Yes, but in such cases Shipping Bill / Bill of Exports should contain the name of Third Party along with EPCG Authorization number.

      In case of direct export, EO is calculated as 6 times of actual duty saved value. And in domestic sourcing, EO is calculated as 6 times of duty save value calculated as per notional custom duty on FOR Value.

      Provisions for extension in the EO Period shall be governed as per the EPCG license issue date. For example, the EPCG License issued prior to the notification of FTP 2015-20 shall be governed by relevant provisions of HBP Vol 1 applicable at the time of issuance of EPCG Authorization. As per Current Policy in place – Yes, We can extend the Export Obligation period by two years after completion of 6 Years (6+2=8 Years). We can extend by paying a composition of 5% for the first year and 10% for the second year on the proportionate Duty saved value on pending / unfulfilled Export Obligation. But the minimum composition fee to be paid is Rs. 10,000/-. Alternatively, if the Exporter doesn’t want to pay the composition fees and has procured new export orders. He can enhance the EO by 10%/20% for the first/second-year respectively. In such cases, no composition fees will be required.

      Further extension of EO after (6+2=8 Years) is difficult. You have to apply to the EPCG Committee at DGFT New Delhi for an extension. The extension can be granted of an additional 2 years in case of genuine hardships only.

      If the authorization holder failed to fulfill the specific export obligation but maintained average export obligation, the holder has to pay proportionate Duty Saved Amount with 15% annual interest on pending specific export obligation on actual imported capital goods at customs and submit the proof of duty paid to license authority concerned.

      If Average Export Obligation is not fulfilled, but Specific EO is fulfilled, Then Entire duty saved amount with 15% annual interest should be paid at Customs and submit the proof of duty paid to DGFT for regularization.

      If the Authorization holder has fulfilled 100% Average Export Obligation each year from the issue of license and 75% or more of Specific Export Obligation in half or less than half of the original Export Obligations period, the holder can redeem the license as per para 5.09 FTP.

      If the EPCG Scheme is availed for the below mentioned Export products, then the average export obligation will be exempted:

      • Handicrafts,
      • Handlooms,
      • Cottage & Tiny sector
      • Agriculture
      • Aqua-culture (including Fisheries), Pisciculture,
      • Animal husbandry,
      • Floriculture & Horticulture,
      • Poultry,
      • Viticulture,
      • Sericulture,
      • Carpets,
      • Coir, and
      • Jute.

      Apart from the exemption to the above sectors, relaxation is also provided to such sectors where the global growth rate has declined more than 5% for a particular FY.

      The next step is to close the EPCG License and apply for redemption/Closure. We need to fill the redemption form ANF 5B along with the specified documents mentioned in the form and submit it with the original license at the DGFT RA for Closure.

      EPCG Redemption or EPCG License closure procedure is a mechanism through which the DGFT monitors the fulfilment of the export obligation given to holder by the Government. We can help you in closure of EPCG License by preparing correct documents as per DGFT Rule.

      The License holder has to fill the redemption form of ANF 5B with the relevant documents mentioned and submit to DGFT RA. The DGFT will issue a closure certificate called Export Obligation Discharge Certificate.

      Yes, we do help in redemption of EPCG License.

      We can surrender the EPCG License, if the holder does not want to import capital goods by submitting the relevant documents. We can help you in preparing and submitting the documents for surrender at DGFT.

      No, EPCG License is non-transferable.

      No, EPCG License is not possible to sell.

      The import validity of EPCG License is 2 years and export validity of EPCG License is of 6years from the issue of license.

      Related articles on EPCG Scheme

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