Written by: Paras Nagpal, Business Consultant, GetMyCA
Reviewed by: GetMyCA Export & Compliance Advisory Team | Verified against DGFT Public Notice No. 15/2024-25 and No. 24/2024-25
Last Reviewed: 22 July 2026
Official sources used: FTP Notification No. 1/2023, HBP Public Notice No. 1/2023, DGFT Public Notice No. 15/2024-25 dated 25 July 2024, DGFT Public Notice No. 24/2024-25 dated 20 September 2024, ICEGATE Scheme Code reference.
Quick Answer
The EPCG Scheme (Export Promotion Capital Goods Scheme) allows eligible Indian exporters to import capital goods under the prescribed zero-duty customs route, in exchange for fulfilling export obligation under the Foreign Trade Policy 2023 and applicable customs notification. Core mechanics - zero-duty import, export obligation linked to duty saved, and manufacturer/merchant/service-provider coverage - are confirmed in official government guidance. Compliance requirements including installation certificate timing and EO-fulfilment reporting were amended in 2024, so users should follow the latest DGFT notices before acting.
Source: FTP Notification No. 1/2023; DGFT Public Notice No. 15/2024-25; Public Notice No. 24/2024-25
The EPCG Scheme, or Export Promotion Capital Goods Scheme, is a Government of India initiative under the Foreign Trade Policy 2023 that allows eligible exporters to import capital goods under the prescribed zero-duty customs route. In return, the exporter commits to fulfilling a specific export obligation - six times the duty saved - within six years of the authorisation date. The scheme is administered by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry.
The EPCG Scheme was first introduced in the early 1990s as part of India's export promotion framework. It is currently governed by Foreign Trade Policy 2023 (FTP 2023), Chapter 5, read with the Handbook of Procedures 2023.
In practical customs filing, ICEGATE lists Scheme Code 12 as Zero Duty EPCG Scheme. Exporters should verify the exact import-duty, IGST and cess treatment from the current CBIC notification before import.
Key Takeaways
- EPCG Scheme allows import of capital goods under prescribed zero-duty customs route under FTP 2023.
- Export obligation is 6 times the duty saved, to be fulfilled within 6 years.
- Administered by DGFT - not CBIC. Governed by FTP 2023, Chapter 5.
- Eligible: Manufacturer exporters, merchant exporters, eligible service providers.
- Scheme Code: EPCG imports processed under Customs Scheme Code 12 (ICEGATE).
- Installation certificate: Must be submitted within 3 years of import completion (amended July 2024).
- EO reporting: Annual reporting replaced - report now due after first 4-year block period (amended September 2024).
- GetMyCA helps exporters with EPCG eligibility check, documentation and compliance.
What Is the EPCG Scheme?
The Export Promotion Capital Goods (EPCG) Scheme is a trade facilitation scheme that enables eligible Indian exporters to import capital goods - machinery, equipment, tools, dies, moulds and related items - under the prescribed zero-duty customs route. The objective is to help exporters modernise production capacity and improve quality without bearing the full burden of import duties on machinery.
It operates on a deferred obligation model: the government waives customs duty upfront at the time of import (subject to the applicable customs notification), and the exporter fulfils the corresponding export obligation over a fixed period. If the obligation is met, no duty is recovered. If not, the duty becomes payable along with applicable interest and penalties as per Customs Act provisions and DGFT guidelines.
Official source: DGFT, Foreign Trade Policy 2023, Chapter 5 (dgft.gov.in)
What Is the Full Form of EPCG?
EPCG stands for Export Promotion Capital Goods. The scheme is often written with the suffix 'S' as EPCGS to denote 'Scheme.' Both EPCG and EPCGS refer to the same government programme. It is sometimes misspelled as EPGC or EPSCG - the correct full form is Export Promotion Capital Goods.
| Term |
Meaning |
| EPCG |
Export Promotion Capital Goods |
| EPCGS |
Export Promotion Capital Goods Scheme |
| FTP 2023 |
Foreign Trade Policy 2023 (governing document) |
| DGFT |
Directorate General of Foreign Trade (administering authority) |
| EO |
Export Obligation - the export commitment the authorisation holder must fulfil |
| Scheme Code 12 |
Zero Duty EPCG Scheme - as listed on ICEGATE |
Which Authority Administers the EPCG Scheme?
The EPCG Scheme is administered by the Directorate General of Foreign Trade (DGFT), which functions under the Ministry of Commerce and Industry, Government of India. It is not a GST or CBIC scheme. The governing framework is the Foreign Trade Policy 2023 (FTP 2023), read with the Handbook of Procedures 2023.
DGFT's Regional Authority (RA) issues EPCG authorisations. Exporters file all applications, amendments, redemption requests and EODC applications through the DGFT online portal at dgft.gov.in.
| Authority |
Role |
| DGFT |
Issues EPCG authorisation, monitors export obligation |
| Ministry of Commerce and Industry |
Policy oversight |
| Customs (CBIC) |
Allows duty-free clearance at port of import per applicable notification |
| DGFT Regional Authority (RA) |
Application processing and redemption |
Who Is Eligible for the EPCG Scheme?
The EPCG Scheme is available to a broad range of export-oriented entities under the Foreign Trade Policy 2023.
| Category |
Eligible? |
Condition |
| Manufacturer Exporter |
Yes |
Must export goods manufactured using imported capital goods |
| Merchant Exporter |
Yes |
Must be tied to a supporting manufacturer |
| Service Provider |
Yes |
Must export services and hold a valid IEC |
| Common Service Provider (CSP) |
Yes |
Registered with DGFT; conditions apply under current FTP/HBP |
| MSME Exporters |
Yes |
Subject to same eligibility conditions |
| Eligible service providers (hotels, hospitals, etc.) |
Verify |
Coverage as eligible service providers under current FTP/HBP - verify category-specific eligibility before applying |
| Purely Domestic Businesses |
No |
Export obligation cannot be fulfilled without exports |
Applicants must hold a valid Importer Exporter Code (IEC) and must not be on any negative list maintained by DGFT. Businesses without an IEC can refer to GetMyCA's IEC Code service for assistance.
What Are the Key Benefits of the EPCG Scheme?
| Benefit |
Detail |
| Zero Customs Duty |
Capital goods imported under EPCG authorisation attract nil basic customs duty per applicable customs notification |
| Wider Capital Goods Definition |
Includes machinery, spares, dies, moulds, jigs, and refurbished goods |
| Domestic Sourcing Option |
Capital goods can also be procured from Indian manufacturers under the scheme |
| Post-Export EPCG Option |
Pay duty first, import goods, fulfil exports, then claim duty credit scrips; specific EO is 85% of standard EO in this case |
| Technological Upgrade |
Existing EPCG machinery can be upgraded under a new authorisation |
| Supports MSMEs |
Reduces upfront capital cost for smaller exporters to modernise |
| Applicable Across Sectors |
Manufacturing, services, and eligible service providers all covered subject to FTP/HBP conditions |
What Is Export Obligation Under EPCG Scheme?
Export obligation (EO) is the commitment an EPCG authorisation holder makes to export goods or services worth a specified value within a fixed period. Under FTP 2023, the standard export obligation is six times the duty saved on the imported capital goods, to be fulfilled within six years from the date of authorisation.
How Is Export Obligation Calculated?
Export Obligation Formula
Specific Export Obligation (EO) = 6 × Duty Saved on Capital Goods Imported
Illustrative Example:
CIF value of machinery: ₹50,00,000
Basic Customs Duty applicable: 7.5%
Duty saved = ₹3,75,000
Specific Export Obligation = 6 × ₹3,75,000 = ₹22,50,000
The authorisation holder must export goods/services worth ₹22,50,000 within 6 years.
Note: Illustrative only. Verify actual duty rates and EO calculation at time of application.
Source: FTP 2023, Chapter 5; indbiz.gov.in/trade/export-incentives
Average Export Obligation
In addition to the specific EO, the authorisation holder must also maintain the average level of exports achieved in the preceding three licensing years. This average EO runs concurrently with the specific EO each year until the specific EO is discharged.
| EO Type |
Calculation Basis |
Period |
| Specific EO |
6 × Duty Saved |
6 years from authorisation date |
| Average EO |
Average of last 3 years' exports |
Each year, maintained concurrently |
Imported capital goods remain subject to Actual User condition until export obligation is completed and EODC (Export Obligation Discharge Certificate) is granted.
What Capital Goods Are Allowed Under EPCG?
| Category |
Examples |
| Plant and machinery |
Production lines, CNC machines, boilers, compressors |
| Equipment and accessories |
Testing equipment, pollution control systems, R&D instruments |
| Packaging machinery |
Sealing, labelling, wrapping equipment |
| Refrigeration and power |
Refrigeration units, power generating sets |
| Computer systems |
Software systems, hardware for production control |
| Spares and tooling |
Dies, moulds, jigs, fixtures, refractories |
| Refurbished capital goods |
Permitted subject to applicable FTP/HBP conditions - verify before import |
What Is the Customs Duty Benefit Under EPCG Scheme?
EPCG is primarily a foreign trade and customs benefit scheme administered by DGFT. It is not a GST exemption scheme. The exact customs duty, IGST and cess treatment on import under EPCG depends on the applicable CBIC exemption notification in force on the date of import. Exporters should not assume IGST exemption without checking the current notification with their customs house agent.
Important - Check Before Import
EPCG is administered by DGFT and governs customs duty benefit under FTP 2023.
The exact customs duty, IGST and cess treatment depends on the applicable CBIC notification in force on the date of import.
Always verify the current notification with your customs house agent before filing the Bill of Entry.
Do not assume blanket GST exemption based on EPCG authorisation alone.
On domestic procurement of capital goods under EPCG, the domestic supplier may be eligible for deemed export benefits. The EPCG authorisation holder may claim Input Tax Credit (ITC) on such procurement under GST, subject to standard ITC conditions and applicable GST law.
Exporters may also explore GST refund claims on export-related inputs separately from EPCG benefits. GetMyCA's GST Refund for Exporters service covers this separately.
What Documents Are Required for EPCG Authorisation?
| Document |
Purpose |
Applicability |
| IEC (Importer Exporter Code) |
Mandatory for all DGFT applications |
All cases |
| PAN Card of entity |
Identity and tax linkage |
All cases |
| Certificate of Incorporation / Partnership Deed |
Entity constitution proof |
All cases |
| Last 3 years' export performance data |
For average EO calculation |
All cases |
| Proforma Invoice / Supplier quotation |
For capital goods to be imported |
All cases |
| CA Certificate for previous year exports |
Average EO baseline |
All cases |
| Bank account details + DSC |
For DGFT portal registration and signing |
All cases |
| GST Registration Certificate |
Entity verification - verify requirement with DGFT before filing |
Where applicable |
| RCMC (Registration Cum Membership Certificate) |
Export house / EPC membership |
Where applicable - verify with DGFT RA |
| Chartered Engineer Certificate |
Nexus certificate linking capital goods to export production |
Where applicable - verify requirement |
Document requirements may vary based on applicant category and nature of capital goods. Verify the current checklist on the DGFT portal or with a qualified consultant before filing. Form references should be confirmed from the current DGFT online workflow before application.
What Is the Cost of an EPCG Licence?
The cost of obtaining an EPCG authorisation includes the application fee payable to DGFT, which is based on the CIF value of the capital goods to be imported. Fee schedules are published in the DGFT Handbook of Procedures and are subject to revision. In addition to the government fee, exporters typically incur professional fees for documentation preparation, DGFT portal filing and compliance management. Contact GetMyCA for a consultation on estimated costs for your specific case.
How to Apply for EPCG Authorisation: Step-by-Step
| Step |
Action |
Where |
| 1 |
Obtain valid IEC if not already held |
DGFT portal - dgft.gov.in |
| 2 |
Login to DGFT portal, navigate to EPCG section |
dgft.gov.in -> Services -> EPCG |
| 3 |
File online EPCG application with required declarations |
DGFT portal |
| 4 |
Upload required documents |
DGFT portal |
| 5 |
Pay application fee online |
DGFT portal |
| 6 |
DGFT Regional Authority reviews and issues authorisation |
Within prescribed processing time |
| 7 |
Present authorisation to customs at port of import |
Port of entry |
| 8 |
Import capital goods and file Bill of Entry |
Customs port |
| 9 |
Install equipment and obtain Installation Certificate |
Factory / site |
| 10 |
Submit installation certificate to your DGFT RA within 3 years of completing the import |
DGFT Regional Authority - per PN 15/2024-25 |
| 11 |
File EO fulfilment report after first 4-year block period |
DGFT portal - per PN 24/2024-25 |
| 12 |
Obtain EODC (Export Obligation Discharge Certificate) |
DGFT Regional Authority |
EPCG Post-Import Compliance - What to Track After Approval
EPCG compliance does not end with licence approval. After completion of import, the authorisation holder must track four key compliance areas:
Post-Import EPCG Compliance Checklist
1. INSTALLATION CERTIFICATE
Submit to DGFT Regional Authority within 3 years from date of completion of import.
Source: DGFT Public Notice No. 15/2024-25 dated 25 July 2024
Extension beyond 3 years: allowed up to EO period validity on payment of composition fee of ₹10,000 per year.
2. EXPORT OBLIGATION REPORTING (EO FULFILMENT REPORT)
Annual reporting requirement has been replaced.
New rule: Submit EO fulfilment report online after expiry of the first block period of 4 years,
then continuously until the EO validity period expires.
Report must be certified by a Chartered Accountant, Cost Accountant, or Company Secretary
covering both specific EO and average EO, with shipping bill / FIRC details as applicable.
Source: DGFT Public Notice No. 24/2024-25 dated 20 September 2024
3. AVERAGE EO MAINTENANCE
Maintain average EO each year concurrently with specific EO.
DGFT provides sector-wise relief if exports decline more than 5% - check Policy Circulars.
4. ACTUAL USER CONDITION
Capital goods remain under Actual User condition until EODC is granted.
Do not transfer, lease or dispose of capital goods before EODC.
EPCG Scheme vs Advance Authorisation: What Is the Difference?
| Parameter |
EPCG Scheme |
Advance Authorisation |
| Purpose |
Import capital goods for production |
Import inputs for export production |
| What is imported |
Machinery, equipment, tools |
Raw materials, components, inputs |
| Governing chapter |
Chapter 5, FTP 2023 |
Chapter 4, FTP 2023 |
| Duty benefit |
Zero customs duty on capital goods per applicable notification |
Zero duty on inputs |
| Export obligation |
6x duty saved, 6 years |
Export of finished goods using inputs |
| Post-use value |
Capital goods remain with exporter (under Actual User condition) |
Inputs consumed in production |
| Suitable for |
Capacity expansion, modernisation |
Input-linked export production |
Note: Duty Drawback is a separate post-export remission scheme and operates on a different principle from both EPCG and Advance Authorisation. It should be evaluated independently based on your export structure.
Common EPCG Compliance Mistakes to Avoid
| Mistake |
Risk |
How to Avoid |
| Not tracking Specific EO vs Average EO separately |
Partial non-fulfilment leads to proportional duty recovery |
Maintain export register mapped to each authorisation |
| Missing Installation Certificate deadline (3 years) |
Non-compliance with PN 15/2024-25 |
File installation certificate with DGFT RA within 3 years of import completion |
| Assuming annual EO reporting still applies |
Outdated compliance - rule changed September 2024 |
Submit EO fulfilment report after first 4-year block period per PN 24/2024-25 |
| Fulfilling EO with ineligible exports |
EO credit rejected during redemption |
Verify which exports qualify before filing |
| Not applying for EO extension in time |
Duty recovery with applicable interest |
Apply for extension before EO period expires; composition fee now applies |
| Wrong HS Code on Bill of Entry |
Goods not covered by authorisation |
Match HS code carefully with EPCG authorisation schedule |
| Placing machinery order before EPCG authorisation |
Import may not qualify under scheme |
Always obtain authorisation before placing import order |
| Not checking bank guarantee requirement |
Clearance may be held up at port |
Check bank guarantee requirement with customs before import |
| Transferring capital goods before EODC |
Violation of Actual User condition |
Keep capital goods under Actual User condition until EODC is granted |
Frequently Asked Questions
Q1. What is the EPCG Scheme under DGFT?
The EPCG Scheme is a trade facilitation scheme under the Foreign Trade Policy 2023, Chapter 5, administered by DGFT. It allows eligible exporters to import capital goods under the prescribed zero-duty customs route, subject to fulfilling a Specific Export Obligation of six times the duty saved within six years of authorisation.
Q2. Who can apply for EPCG authorisation?
Manufacturer exporters, merchant exporters tied to supporting manufacturers, eligible service providers and Common Service Providers (CSPs) registered with DGFT can apply, provided they hold a valid IEC and are not on any DGFT negative list. Category-specific eligibility should be verified under current FTP/HBP before applying.
Q3. Is EPCG import completely duty free?
Under FTP 2023, the basic customs duty on eligible capital goods is zero under EPCG per the applicable customs notification. IGST treatment depends on a separate CBIC notification in force at the time of import. Always verify IGST applicability with your customs house agent before filing the Bill of Entry.
Q4. What is the export obligation period under EPCG?
The standard export obligation period is six years from the date of issue of the EPCG authorisation. Extension may be applied for subject to DGFT approval and applicable composition fees. DGFT also extended EO periods automatically in March 2026 for authorisations affected by global shipping disruptions.
Q5. What is the validity period of EPCG authorisation for imports?
The import validity of an EPCG authorisation is as specified in the authorisation issued by DGFT. Exporters should verify the exact import validity period at time of authorisation and apply for extension before expiry if required.
Q6. What is the installation certificate deadline?
As per DGFT Public Notice No. 15/2024-25 dated 25 July 2024, the installation certificate must be submitted to the concerned DGFT Regional Authority within 3 years from the date of completion of import. Extension beyond 3 years is allowed up to the EO period on payment of a composition fee of ₹10,000 per year.
Q7. Is annual EO reporting still required?
No. As per DGFT Public Notice No. 24/2024-25 dated 20 September 2024, annual reporting has been replaced. The authorisation holder must now submit an EO fulfilment report after expiry of the first block period of 4 years and then continuously until the EO validity period expires. The report must be certified by a Chartered Accountant, Cost Accountant, or Company Secretary.
Q8. When was the EPCG Scheme introduced?
The EPCG Scheme was first introduced in the early 1990s as part of India's export promotion framework. It has been revised under successive Foreign Trade Policies and is currently governed by Foreign Trade Policy 2023.
Q9. What is the Customs Scheme Code for EPCG?
EPCG imports are processed under Customs Scheme Code 12 (Zero Duty EPCG Scheme) as listed on ICEGATE. Exporters should confirm the applicable scheme code with their customs house agent at the time of filing the Bill of Entry. Source: ICEGATE Scheme Enquiry (icegate.gov.in).
Q10. Can MSME exporters apply for the EPCG Scheme?
Yes. MSME exporters are eligible on the same terms as larger exporters, provided they hold an IEC and meet the eligibility conditions under FTP 2023.
Q11. What happens if the export obligation is not fulfilled?
If the export obligation is not fulfilled within the specified period, customs duty on the imported capital goods becomes recoverable along with applicable interest and penalties as per Customs Act provisions and DGFT guidelines. Exporters should apply for regularisation or extension well in advance.
Q12. Can EPCG benefits be combined with other export incentives?
EPCG benefits can generally be availed alongside other export incentives such as RoDTEP and RoSCTL, subject to conditions laid down by DGFT. Each scheme's conditions should be verified independently before combining benefits.
Q13. Is the EPCG Scheme relevant for UPSC and competitive exams?
Yes. The EPCG Scheme is a frequently asked topic in UPSC General Studies and other competitive examinations under India's Foreign Trade Policy and export promotion chapters. Key facts: administered by DGFT, zero customs duty on capital goods per applicable notification, export obligation 6 times duty saved, governed by FTP 2023 Chapter 5.
Q14. Is EPCG Scheme still available in 2026?
Yes. The EPCG Scheme is active under Foreign Trade Policy 2023. Exporters can apply through the DGFT online portal at dgft.gov.in. DGFT also extended EO periods automatically in March 2026 for authorisations affected by global geopolitical disruptions.
Need Help With EPCG Eligibility, Documentation or Export Obligation Compliance?
GetMyCA supports exporters with scheme evaluation, DGFT application preparation,
export obligation tracking, installation certificate filing and redemption assistance.
Call: +91 92174 87001
Email: hello@getmyca.com
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Website: www.getmyca.com
About the Author
Paras Nagpal
Business Consultant, GetMyCA
Business Consultant, GetMyCA - advising businesses on GST, export compliance and DGFT matters since 2015.
Email: paras@getmyca.com | Phone: +91 92174 87001
Reviewed by: GetMyCA Export & Compliance Advisory Team | Verified against DGFT Public Notice No. 15/2024-25 and No. 24/2024-25
Last Reviewed: 22 July 2026
Disclaimer
This article is for general informational purposes on EPCG under the Foreign Trade Policy framework. Eligibility, export obligation, exemption treatment, documentation and compliance may vary based on the authorisation, customs notification, and factual scenario. All information is as per Foreign Trade Policy 2023 and amendments issued by DGFT from time to time, including Public Notice No. 15/2024-25 and Public Notice No. 24/2024-25. Always verify the current DGFT and CBIC position before importing, filing, or relying on this content for a business decision. Consult a qualified professional for your specific situation.
About GetMyCA
GetMyCA Consultants Private Limited is a trusted business consultant based in New Delhi, serving clients across India since 2015. Our team supports entrepreneurs and businesses with GST registration, GST refund claims, company registration, tax compliance, export documentation, BIS certification, subsidy advisory and ongoing regulatory compliance.
Office: NS-21, LGF, Mianwali Nagar, Near Peeragarhi Metro Station, New Delhi - 110087
Website: www.getmyca.com | Email: hello@getmyca.com | Phone: +91 92174 87001