How to Apply for EPCG
The Export Promotion Capital Goods (EPCG) scheme allows exporters to import capital goods — machinery, equipment, and components — at zero customs duty, subject to fulfilling an export obligation equal to 6 times the duty saved, within 6 years from the date of authorisation. It is one of India's most powerful export-financing tools.
Before you start
- IEC (Import Export Code)
- RCMC from the relevant Export Promotion Council
- Details of the capital goods to be imported (HS codes, CIF value, technology)
- Average annual export performance for the past 3 years
- No outstanding EPCG or Advance Authorisation defaults with DGFT
Step-by-step
Assess Export Obligation Feasibility
Calculate the export obligation: 6x the CIF value of capital goods × applicable import duty rate = duty saved × 6. Assess whether your business can realistically achieve this export level within 6 years. Underestimating risks penalties on the shortfall.
Log in to DGFT Portal and Select EPCG
Visit dgft.gov.in and navigate to the EPCG authorisation module under 'Import/Export'. Select 'Fresh EPCG Authorisation' and choose whether the capital goods are for manufacturing, services, agriculture, or aquaculture.
Fill Form ANF-5A and Upload Documents
Complete Form ANF-5A with details of the capital goods (HS codes, specification, CIF value) and your average export performance. Upload: IEC, RCMC, last 3 years' export data from DGFT or bank certificates, and the Chartered Accountant certificate of export turnover.
Pay Application Fee and Submit
Pay the DGFT application fee online. Submit the application. DGFT Regional Authority typically processes EPCG applications within 30 working days; pre-import EPCG applications may be issued before the goods arrive at port.
Register Authorisation with Customs
Once the EPCG authorisation is issued, register it with the customs office at the port of import before the goods arrive. The customs officer endorses the authorisation, allowing duty-free clearance.
Fulfil Export Obligation and File EODC
Export goods worth 6x the duty saved within 6 years. Maintain detailed export records. After completing the obligation, file the Export Obligation Discharge Certificate (EODC) with DGFT within 3 months of fulfilment — or apply for an extension if needed.
Common mistakes to avoid
- Importing capital goods before registering the authorisation with Customs — duty exemption is only available after Customs registration.
- Misidentifying eligible capital goods — second-hand machinery and certain consumer goods are excluded from EPCG.
- Not maintaining block-year export obligation records — DGFT requires proportionate exports each year (block-year monitoring) to avoid early default notices.
- Failing to file EODC within 3 months of obligation fulfilment — delayed filing can lead to unnecessary interest computation on the duty foregone.
Frequently asked questions
Can domestic manufacturers use the EPCG scheme?
Yes. The scheme allows importation of capital goods from foreign manufacturers as well as procurement from domestic manufacturers who in turn can claim deemed export benefits.
What happens if I cannot meet the export obligation?
If the obligation is not fulfilled, customs duty on the goods plus interest at 15% per annum must be paid on the shortfall. DGFT can also impose a penalty of up to 3 times the duty foregone on the shortfall.
Can EPCG be used for services exporters?
Yes. Service exporters, including hotels, hospitals, R&D establishments, and software exporters, can obtain EPCG licences for equipment and technology used in rendering export services.
Is EPCG compatible with other export schemes?
EPCG can be combined with Advance Authorisation (for inputs) but the export obligation under both schemes must be fulfilled separately. Supplies made under an Advance Authorisation cannot simultaneously count toward EPCG export obligation.
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