Circular No. 36 dated 25^th June 1996

Notification No. 110/95-Customs dated the 5th June, 1995 relating to 15% EPCG Scheme and notification No.111/95-Customs dated the 5th June, 1995 relating to zero duty E.P.C.G. Scheme have been respectively amended by notifications No.31/96-Customs and 32/96-Customs both dated 17th June, 1996. Copies of the amending notifications are enclosed for ready reference.

2.      With these amendments permissibility of import of spares under both the schemes have been increased from 10% of the value of capital goods to 20% of the value of capital goods in conformity with the changes made in para 38 of Exim Policy. Notifications have also been amended to permit discharge of Export Obligation by making deemed export supplies in terms of clauses (a), (c), (e), (f) and (i) of para 121 of the Export and Import Policy. While doing so it has been kept in view that provisions of para 41(iv) of the Exim Policy deny the benefit of Para 122 to providers of such supplies.

3.      The notification No.110/95-Customs dated 5^th June 1995 relating to 15% EPCG Scheme has been further amended to extend the scheme to merchant exporters who are issued EPCG licence by the Licencing authority. The eligibility is subject to the conditions that capital goods shall be installed in the factory of supporting manufacturer whose name and address is endorsed on the EPCG Licence and a bond for full difference of duty with 100% Bank Guarantee is executed by the merchant exporter and his supporting manufacturer binding themselves jointly and severally to fulfil the export obligation a all other conditions of the Customs notification.

4.      The changes may be brought to the notice of trade through suitable Public Notices and to the notice of staff through standing orders.