EPCG Advisory
by Prikriti Group
Import capital goods at zero customs duty. We handle the entire EPCG lifecycle — from filing to EODC closure.
Import Capital Goods at
Zero Duty
Under the EPCG Scheme, you can import machinery, equipment, spares, and tools at 0% Basic Customs Duty + IGST — against an export commitment of 6× the total duty saved (BCD + IGST), within 6 periodics.
Our advisory team structures the authorisation from the ground up — accurate CIF valuation, correct ITC(HS) classification, Chartered Engineer nexus certification, EO planning, ICEGATE registration, block-wise tracking, and final EODC redemption. Every step is handled in-house through the digital DGFT portal.
"A properly structured EPCG authorisation can save your business crores in import duty — without compromising compliance."
Zero Duty on Capital Goods
Import machinery, equipment, and production assets at 0% Basic Customs Duty against an Export Obligation of 6× the duty saved, to be fulfilled within 6 periodics from the date of authorisation.
0% BCD + IGST · 6 periodics EODomestic Sourcing Benefit
Capital goods can be procured from Indian manufacturers under the same authorisation. Specific EO is 25% lower than direct-import EO, and the domestic supplier is eligible for Deemed Export Benefits under Para 7.03 of FTP.
25% Lower EOWhat Qualifies as Capital Goods?
Plant and machinery, equipment, computer systems and software forming part of capital goods, spares, moulds, dies, jigs, fixtures, tools, refractories, and catalysts for initial charge. Negative-list items in Appendix 5F are excluded.
Broad CoverageGreen Technology Products
Exporters of notified green technology products enjoy a reduced Specific EO of 75% of the standard obligation — a direct incentive for sustainable manufacturing.
75% Reduced EONorth East & UT Benefits
Manufacturing units in notified North Eastern States and UTs of Jammu & Kashmir & Ladakh are eligible for a reduced Specific EO, wherein only 25% of the standard EPCG EO is applicable, as per Para 5.11 of FTP 2023.
25% of EOWho Should Consider
EPCG?
EPCG is relevant for businesses with a valid IEC that are earning or planning to earn foreign exchange through exports of goods or services, and where the proposed capital goods have a direct nexus with the export product or export service.
Manufacturer Exporters
Businesses in sectors such as textiles, engineering, chemicals, metals, plastics, pharma and food processing importing capital goods with direct nexus to their export products.
Merchant Exporters
Merchant exporters tied to supporting manufacturers who are planning to import capital goods linked to their export commitments.
Service Exporters
Hotels, hospitals, IT/ITES, logistics, aviation, healthcare and other foreign-exchange-earning service providers eligible to import capital goods at zero duty.
Agro & Food Processing Units
Units importing or sourcing production-linked capital goods for agro processing and food manufacturing operations tied to export activity.
Gems & Jewellery Exporters
Gems and jewellery exporters subject to scheme conditions and nexus requirements, eligible for EPCG on qualifying capital goods.
Common Service Providers
Common Service Providers in Towns of Export Excellence eligible to apply for EPCG for shared capital goods servicing multiple exporters.
High-Volume Exporters
Exporters planning capacity expansion, automation, modernization or technology upgrades with significant capital goods import requirements.
Key Benefits of
EPCG
Properly structured EPCG authorisations deliver measurable financial and operational benefits across your trade cycle.
Zero Customs Duty
Eligible capital goods can be imported at zero customs duty under EPCG, subject to fulfilment of Specific EO and Annual Average EO.
Improved Working Capital
Duty savings remain available for raw material procurement, capacity expansion, R&D, automation or business growth instead of being blocked at the time of import.
Domestic Sourcing Incentive
If eligible capital goods are sourced from Indian manufacturers, Specific EO is reduced by 25%, while the domestic supplier may claim deemed export benefits as applicable.
Early Redemption Benefit
Where the authorisation holder fulfils at least 75% of Specific EO and 100% of Annual Average EO in half or less than half of the original EO period, the remaining Specific EO may be condoned and the authorisation can be closed early.
Regional & Sectoral Incentives
Notified North Eastern States, Jammu & Kashmir and Ladakh units have Specific EO at 25% of standard EO; notified green technology products have Specific EO at 75% of standard EO.
End-to-End Compliance Visibility
Structured EO tracking helps avoid last-minute duty, interest, bond and bank guarantee exposure.
Export Obligation
— At a Glance
Every EPCG authorisation comes with obligations. We track Specific EO and Annual Average EO quarterly, reconcile every shipping bill, file extensions if needed, and submit the EODC the moment your obligation is complete.
Specific Export Obligation: 6× the duties, taxes and cess saved, to be fulfilled within 6 periodics from the date of authorisation.
Annual Average EO: Must maintain average export levels from the preceding 3 licensing periodics for the same/similar products, unless specifically exempted.
Block-wise fulfilment: Typically split as 50% in the first block of 4 periodics and 50% in the second block of 2 periodics.
Early closure: Where at least 75% of Specific EO and 100% of Annual Average EO is fulfilled in half or less of the EO period, remaining obligation may be condoned.
We proactively track your EO balance, reconcile every shipping bill, alert you before deadlines, and file EODC once obligations are fulfilled — so your licence is closed cleanly and on record.
Our EPCG Advisory
Process
Seven steps. End-to-end. We handle filing, follow-up, import support, tracking and closure.
Nexus Assessment & Eligibility
Confirm direct nexus between capital goods and export product/service; review IEC, RCMC, export history, proposed imports and ITC(HS) classification.
Eligibility Review · Nexus CheckDocumentation & CE/CA Certification
Prepare Chartered Engineer nexus certification, CA-certified export turnover and duty-saved workings, manufacturer/supporting manufacturer details and required declarations.
Documentation · CE & CA CertificationOnline Filing on DGFT Portal
File ANF 5A with DSC/e-sign, upload documents, calculate duty saved accurately and complete electronic fee payment.
Online Filing · Fee PaymentRA Follow-Up & Deficiency Response
Track status, respond to deficiency letters, clarify classification/nexus issues and represent the case where needed.
Status Tracking · Deficiency ResponseIPort Registration & Customs port Support
Supports you with EPCG licence registration coordination with Customs/ICEGATE through your CHA, assists with bond, LUT or Bank Guarantee structuring, and coordinates import-clearance requirements before shipment/import.
License Registration · Customs CoordinationInstallation Certificate & EO Tracking
Arrange and upload the installation certificate within the prescribed timeline; track Specific EO, Annual Average EO and block-wise performance periodically.
Installation Certificate · EO MonitoringEODC Filing & BG/Bond Closure
File ANF 5B after EO fulfilment, coordinate EODC issuance, and support cancellation/release of Bank Guarantee, bond and Customs obligations.
EODC Filing · BG Release · Clean ClosureRisks if Wrongly Structured
EPCG defaults can be expensive. The main risks are preventable if the authorisation is structured and monitored correctly from day one.
Specific EO Shortfall
Proportionate duties, taxes and cess attributable to the shortfall may become payable, along with applicable Customs interest.
Annual Average EO Default
Even if Specific EO is met, failure to maintain Annual Average EO can trigger regularisation, duty/interest exposure or closure delays.
Block-1 Shortfall
If the first-block obligation is not achieved within the prescribed period, proportionate regularisation, extension or composition fee exposure may arise.
Incorrect ITC(HS) or Weak Nexus
Incorrect classification or poor nexus evidence can result in filing rejection, deficiency letters, Customs objections or EODC verification issues.
Customs Registration Gaps
Failure to register the EPCG authorisation before clearance can jeopardise concessional duty treatment and delay imports.
Missing Installation Certificate
Non-submission within the prescribed timeline is a common deficiency and can delay closure of the authorisation.
Unauthorised Sale or Transfer
Capital goods imported under EPCG cannot be freely disposed of or diverted unless scheme conditions are satisfied.
Delayed EODC Filing
The licence remains open, bond exposure continues and Bank Guarantee may remain blocked until clean closure is achieved.
How we protect you: Every authorisation is scoped correctly at filing, registered before first import, tracked against Specific EO and Annual Average EO, reviewed for block-wise compliance, and closed cleanly through EODC and Bank Guarantee/Bond release.
Real-World
Case Study
Engineering Goods Manufacturer · Rajkot, Gujarat
Success StoryBackground
A Rajkot-based engineering exporter planned to import CNC machines worth ₹5.80 crore, with estimated duty savings of ₹1.65 crore under EPCG.
Our Approach
Prikriti Group reviewed the product nexus, ITC(HS) classification, duty-saved calculation, CE certification, and filed the EPCG application on DGFT.
After authorisation, Prikriti Group supported licence registration coordination with the CHA, bond/LUT planning, clearance documentation, installation certificate follow-up, and EO tracking.
Outcome
Frequently Asked
Questions
Our advisory is structured for principals, promoters, and finance heads who
understand that every import decision is a financial strategy decision.
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