ZERO DUTY EPCG SCHEME
The Zero duty EPCG Scheme is available to exporters of electronic products. It allows for the import of capital goods for pre-production/production and post-production. This includes including CKD/SKD kits as well as computer software systems at zero% customs duty. All this is subject to an export obligation equivalent to 6 times of duty saved on capital goods imported under EPCG scheme to be fulfilled in 6 years reckoned from Authorization issue-date. (para 5.1 a of FTP).
The period of import will be 9 months. Any exporter availing of this benefit under Technology Upgradation Fund Scheme (“TUFS”) can also avail benefit of Zero duty EPCG Scheme. The export obligation for domestic sourcing of capital goods under EPCG schemes has been reduced by 10% to encourage import substitution. This scheme also permits the indigenous sourcing of capital goods with 25% less export obligation.