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Onetime condonation of time period in respect of obtaining block-wise extension in Export Obligation (EO) period under EPCG Scheme

Circular No.ES/ 205   /2017-18                                                                                              October 31, 2017

To: Members of the Council

Sub:  Onetime condonation of time period in respect of obtaining block-wise extension in Export Obligation (EO) period under EPCG Scheme

Dear Member,

DGFT has issued Public Notice No. 35/2015-2020 dated 25.10.2017 informing about following one time relaxations in procedures in respect of obtaining block-wise extension in Export Obligation period under EPCG scheme.

As you are aware, EPCG authorization holders, while maintaining the average export obligation has to fulfill specific export obligation over the prescribed block period as applicable.

Accordingly, Para 5.14 (c) of the Handbook of Procedures 2015-2020 states as under:

"Where EO of the first block is not fulfilled in terms of the above proportions, except in cases where the EO prescribed for first block is extended by the Regional Authority (RA) subject to payment of composition fee of 2% on duty saved amount proportionate to unfulfilled portion of EO pertaining to the block, the Authorization holder shall, within 3 months from the expiry of the block, pay duties of customs (along with applicable interest as notified by DOR) proportionate to duty saved amount on total unfulfilled EO of the first block".

Para 5.14 (d) of the Handbook of Procedures 2015-20 specifies the governance of the relevant provisions for block-wise Export Obligation in respect of EPCG authorizations issued between 1st April 2002 and 18.04.2013.

In view of the time limit of 3 months prescribed in the relevant provisions, during which time the EPCG authorization holder was required to obtain the block extension in Export obligation from the RA on payment of composition fee, the RAs concerned are unable to consider such requests wherein submissions are made after 3 months which are as follows:

  • Many times such requests are for regularization of exports already made.
  • A large number of requests for condonation of this period of non-submission within the prescribed time period for obtaining block period extension are received in the DGFT Headquarters.
  • This has caused hardship and delay in closure of EPCG authorizations.
  • The EPCG authorization holders were required to approach Regional Authority (RA) within the prescribed period for obtaining the requisite extension on payment of composition fee or should have paid the proportionate duty to the Customs to regularize the block-wise EO period.

Therefore, as a onetime measure in relaxation of procedure, it has been decided that –

  • RAs concerned may consider the requests for block-wise Export Obligation period extension for the equests already submitted but submitted beyond the time on payment of additional composition fee of Rs. 5000/- in addition to payment of regular composition fee as applicable.
  • The RA may also consider the requests that may be received upto 31.03.2018 under this facility.
  • This shall be subject to the condition that the case is otherwise in order and submission of installation certificate for the capital goods imported to the RA concerned.
  • This facility is for EPCG authorizations issued from 1st September, 2004.

This facility would not be available in respect of the following cases:

  1. Where the issue is under investigation/adjudicated by RA/customs authority/ any other investigating agency.
  1. Where the EPCG committee has rejected such extension requests.

Members may kindly make a note of the above.

Thanking you,

S BALARAJU
EXECUTIVE DIRECTOR

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