Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

Subject : EPCG (5% Scheme) - duty incidence on service providers

        Kind attention is invited to DOR Circular No. 39/2000-Cus., dated 11-5-2000 wherein the changes effected in EPCG and Duty Exemption Schemes announced in Exim Policy 2000-2001 on 31-3-2000 where outlined.  As regards issue of licence to service providers under 5% duty EPCG Scheme, it was mentioned that DGFT would issue licences only to those service providers to whom EPCG Licence under 10% duty/zero duty Scheme was issued earlier.  The above said provision has raised doubts whether in respect of 5% duty EPCG Licence issued to service providers it would be necessary for Customs to ascertain whether in the past such licence was issued under 10% zero duty Scheme.

2.        The Exim Policy 2000-2001 announced on 31-3-2000 provides for issue of EPCG Licence to all categories of service providers irrespective of whether 10% zero duty lincece was issued in the past. As import licences are issued by DGFT authorities in terms of Exim Policy, it would not be proper on the part of Customs to go into this aspect at the time of allowing clearance of goods.

3.        It is, therefore, clarified that for the purpose of extending duty concession under 5% duty EPCG Scheme to service providers, Customs would extend 5% duty benefit so long as the conditions specified in Customs 49/2000-Cus., dated 27-4-2000 are fulfilled and the licence is otherwise valid to cover imported goods.

4.        Standing Orders/Departmental orders for the information and guidance of the field staff and trade/public notices for the trade may be issued and copies of the same may be forwarded to Joint Secretary (Drawback).