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Export obligation clause diluted

FOREIGN TRADE POLICY/ EPCG

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Our Bureau New Delhi
Last Updated : Feb 06 2013 | 8:20 AM IST
Companies fulfilling 75% of their export obligation in half the time to benefit
 
The government today diluted the export obligation provisions under the export promotion capital goods (EPCG) scheme while announcing sops for the agriculture, small-scale and retail sectors under the scheme.
 
Companies that fulfill over 75 per cent of their export obligation under the scheme in half or less than half the prescribed period can now be freed of their obligations in the remaining period.
 
Commerce ministry officials said the new measure would help in raising exports, and even if a few exporters did not fulfill their obligation for the remaining period, the government would not lose much revenue.
 
The Centre had forgone Rs 3,731 crore in revenue during April-January 2004-05 under the EPCG scheme against Rs 3,400 crore during the last fiscal. Changes in the scheme formed a large part of the measures announced in the Foreign Trade Policy today.
 
Sops under EPCG were also offered to agriculture where concessional duty imports by agro units would now be entitled to a longer period of time with a reduced export obligation.
 
The export obligation has been revised to six times the duty saved over a 12-year period instead of the earlier level of eight times the duty saved in eight years.
 
Commerce and Industry Minister Kamal Nath also said small-scale units can now import capital goods on payment of 5 per cent Customs duty subject to fulfillment of the export obligation of six times the duty saved over an eight-year period instead of eight times earlier.
 
The government also permitted rupee receipts by minor ports, inland container depots and container freight stations for port-handling services, to be calculated for discharge of export obligations.
 
As part of the simplification measures under the scheme, units can now hope to do without the requirement of submitting an installation certificate for machinery imported under the scheme if they are not registered with central excise. In lieu of a central excise certificate, a chartered engineer certificate will now suffice.
 
Further, the facility of clubbing of licences has been further liberalised and conditions regarding the same licensing year and same products or services deleted.
 
As a result, all EPCG licences issued under the same notification can now be clubbed, which will help companies reduce paperwork.
 
To create modern infrastructure in the retail sector, concessional duty benefits under the scheme shall be extended for import of capital goods required by retailers having a minimum covered shopping area of 1,000 sq metres.
 
The retailer would be required to fulfil the export obligation under the scheme from payments received against 'counter sales' in free foreign exchange through banking channels as per RBI guidelines.

 
 

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First Published: Apr 09 2005 | 12:00 AM IST

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