EPCG Scheme & Advance Authorisation

Under Para 5.01 of the Foreign Trade Policy 2023, the export obligation under EPCG must be fulfilled within 6 years from the date of issue of the authorisation. If the obligation is not met, customs duty saved along with 15% interest per annum is recoverable under Section 28AA of the Customs Act 1962. Partial fulfilment triggers proportionate redemption under DGFT Public Notice guidelines.

Advance Authorisation under Chapter 4 of FTP 2023 grants exemption from Basic Customs Duty, IGST, and Compensation Cess on inputs imported for physical export. The CIF value of permitted imports is based on SION (Standard Input-Output Norms) notified by DGFT. Where no SION exists, a self-declaration route under Para 4.07 applies, subject to independent CA certification of actual input consumption.

Yes. Domestic supplies to an Advance Authorisation holder are treated as deemed exports under Section 147 of the CGST Act 2017, read with Rule 89(1)(g) of the CGST Rules 2017. The supplier can claim a refund of IGST paid, or the AA holder can claim refund of tax paid on deemed export supplies, whichever route is chosen under Notification No. 48/2017-CT.

Redemption requires submission of shipping bills with LEO (Let Export Order) date, Bank Realisation Certificates (BRCs) or eBRC from EDPMS, and installation certificate from a Chartered Engineer for capital goods. The application is filed on the DGFT portal using ANF-5B along with the EODC (Export Obligation Discharge Certificate) request. The CA certifies exports against the authorisation ledger.

EPCG authorisations are not transferable. However, export obligation can be fulfilled through third-party exports under Para 5.13 of FTP 2023, provided the main authorisation holder is named on the shipping bill as the exporter of record. The supporting manufacturer must have a valid IEC under Section 7 of the Foreign Trade (Development and Regulation) Act 1992.