The Directorate General of Foreign Trade (DGFT) has published a notice amending Chapter 5 of the Handbook of Procedures, 2015-20. This amendment relates to one-time relaxation from maintenance of Average Export Obligation and extension in the Export Obligation period for specified EPCG Authorisations. The notice was issued on January 20, 2023.
For the years 2020-21 and 2021-22, no Average Export Obligation is required to be maintained for Export Promotion Capital Goods (EPCG) authorizations issued for hotel, healthcare, and educational sectors.
- For EPCG authorizations issued for Hotel Healthcare and Educational sectors, Export Obligation (EO) period may be extended from the date of expiry for the duration equivalent to the number of days the EO period falls within 1st February, 2020, and 31st March, 2022. This extension will be granted without payment of composition fees. Further, EO extension already granted if any shall be deducted from the extendable EO extension period.
2. For EPCG authorizations, issued for other than Hotel, Healthcare, and Educational sectors, Export Obligation (EO) period may be extended from the date of expiry, for the number of days the existing EO period of an authorization falls within 1st February, 2020, and 31st July, 2021. Such EO extension may be granted without payment of composition fees. However, this extension is subject to a 5% additional export obligation in value terms (in free Foreign Exchange) on the balance export obligation as of 31st March, 2022.
In both of the above scenarios, in cases where the EPCG authorization holder has already obtained an EO extension on payment of composition fees, the refund of the composition fees will not be permitted. In addition, any penalties, duties, and taxes already paid would also not be refunded.