The Indian government has recently announced an amnesty scheme for exporters, aimed at reducing litigation and encouraging exports. The scheme called the Export Promotion Capital Goods (EPCG) Scheme Amnesty, provides several benefits to Indian exporters.

What is the EPCG Scheme Amnesty?

The Export Promotion Capital Goods (EPCG) Scheme is a government initiative that allows Indian exporters to import capital goods for use in their manufacturing processes at zero or concessional customs duty rates. The scheme was launched to boost exports and increase the competitiveness of Indian products in the global market. The EPCG Scheme Amnesty is an initiative to resolve past issues related to the EPCG Scheme and provide relief to exporters.

Under the EPCG Scheme, exporters are required to export goods worth six times the duty saved on the import of capital goods within six years from the date of issue of the license. However, many exporters have been unable to meet this requirement due to various reasons such as economic slowdown, non-availability of orders, and other business-related issues. As a result, they have been subjected to penalties and interest charges for non-fulfillment of export obligations.

The EPCG Scheme Amnesty provides a one-time opportunity to such exporters to regularize their past defaults and make a fresh start. The scheme covers all pending and ongoing cases related to the EPCG Scheme and offers relief to exporters in the form of waiver of penalties, interest, and other charges.

How does the EPCG Scheme Amnesty work?

The EPCG Scheme Amnesty is applicable to all cases related to the EPCG Scheme that are pending or ongoing as on 31st March 2021. To avail of the benefits of the scheme, the exporter must make an application to the Director-General of Foreign Trade (DGFT) along with the necessary documents and payment of a nominal fee.

Once the application is processed and approved by the DGFT, the exporter will be required to export goods worth three times the duty saved on the import of capital goods within three years from the date of approval of the application. The exporter will also be required to maintain an annual average export performance of 75% of the preceding three years’ average.

What are the benefits of the EPCG Scheme Amnesty for Indian exporters?

The EPCG Scheme Amnesty offers several benefits to Indian exporters, including:

Waiver of penalties, interest, and other charges: Under the scheme, exporters can get relief from penalties, interest, and other charges related to past defaults in meeting export obligations under the EPCG Scheme.

Reduced compliance burden: The scheme provides an opportunity to exporters to regularize their past defaults and start afresh, thereby reducing the compliance burden on them.

Boost to exports: The scheme is expected to boost exports by encouraging more exporters to participate in the EPCG Scheme and increase their competitiveness in the global market.

Improved ease of doing business: The scheme is in line with the government’s objective of improving the ease of doing business in India and promoting exports.

The EPCG Scheme Amnesty is a welcome initiative by the Indian government to provide relief to exporters and reduce litigation. The scheme is expected to boost exports and improve the competitiveness of Indian products in the global market. Indian exporters can take advantage of the scheme to regularize their past defaults and start afresh.