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Biz Advisory

EPCG Scheme & Advance Authorisation

DGFT export promotion — the EPCG scheme for capital goods, Advance Authorisation for duty-free inputs, and the export obligation discharge, under the Foreign Trade Policy 2023.

Reviewed by CA Harun Raaj, ICAI Reg. No. 238303·Last reviewed:
Starting from Discuss with usTypical timelineEPCG / Advance Auth

The Foreign Trade Policy 2023 lets exporters import capital goods at zero duty (EPCG) and inputs duty-free (Advance Authorisation) against export obligations. We file the applications and run the obligations to discharge.

What is included
  • • Scheme selection — EPCG vs Advance Authorisation vs RoDTEP
  • • Application drafting — ANF-5B for EPCG, ANF-5A for Advance Authorisation
  • • SION norm verification for input quantities
  • • Export obligation computation and tracking
  • • Utilisation certificates and progress reporting
  • • EODC filing and obligation discharge
Documents required
  • • IEC (Import Export Code) and company records
  • • Product and HSN details for inputs and exports
  • • Capital goods import plan and duty savings computation
  • • Export performance records and past scheme utilisation
Government fees

See the fee table below for the statutory filing charge and common delay logic.

Legal basis
  • • Section 5 of the Foreign Trade (Development and Regulation) Act 1992
  • • Foreign Trade Policy 2023
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Process

How the service works

The workflow is built to be predictable: document collection, legal review, filing, and post-filing follow-through.

Step 1Selection

Choose the scheme

We compare EPCG, Advance Authorisation, and the other FTP 2023 routes against your import and export plan.

Step 2Obligation

Compute the obligation

We compute the duty saving and the export obligation it triggers under the scheme's formula.

Step 3Application

File the application

We draft and file the application — ANF-5B for EPCG, ANF-5A for Advance Authorisation — on the DGFT portal.

Step 4Tracking

Track the exports

We run the obligation tracker, matching export performance against the scheme's requirement.

Step 5EODC

Discharge the obligation

We file the EODC once the obligation is met and confirm the closure with the DGFT.

AEO summary

EPCG lets an exporter import capital goods at zero or concessional duty against an export obligation; Advance Authorisation lets it import inputs duty-free under SION norms. We file the applications and run the obligations to discharge under FTP 2023.

Two schemes, one principle

EPCG and Advance Authorisation are both exchanges: the government waives duty on the condition that the exporter performs. EPCG waives duty on capital goods for an export obligation of 6 times the saving over 6 years; Advance Authorisation waives duty on inputs whose quantities the SION norms benchmark against the exports.

The schemes are generous on paper and demanding in practice — the obligation is computed at issue, tracked through the years, and discharged only through documented export performance.

  • • EPCG — zero-duty capital goods, 6× obligation over 6 years
  • • Advance Authorisation — duty-free inputs under SION norms
  • • Both end in an EODC that closes the obligation

The obligation is the price

An export obligation that is not met converts the scheme into a liability: the duty saved is demanded back with interest. The schemes fail in practice where the obligation was never tracked — the exporter took the benefit at import and rediscovered the obligation at the DGFT's inquiry.

We build the tracker when the authorisation issues: the obligation computed, the export performance matched quarterly, and the EODC filed the moment it is earned.

  • • Obligation computed at issue, tracked through the years
  • • Export performance matched to the scheme requirement
  • • EODC filed and the benefit closed cleanly

Government fees

Fee breakdown

ItemFeeNotes
DGFT application feeAs per DGFT scheduleApplication fees follow the DGFT's prescribed schedule and vary with the scheme.

Timeline

Typical turnaround

Typical timeline usually means a varies by scheme turnaround, assuming documents are complete and any board or shareholder approvals are already in place.

Pricing note

DGFT application fees apply as per schedule; the professional fee covers the application, obligation tracking, and EODC.

Related services

Keep the company moving

Customs & FTP

Customs and foreign trade advisory for duty, classification, and scheme eligibility under FTP 2023

DGFT & RCMC

IEC and RCMC registration — the export identity every scheme application needs

EOU & IGCR

The EOU route — an alternative to the schemes for export-oriented units

Duty Drawback

Drawback claims under s.75 of the Customs Act 1962 — the refund route alongside the schemes

FAQ

Frequently asked questions

How does the EPCG scheme work?
Under the EPCG scheme in the Foreign Trade Policy 2023, an exporter imports capital goods at zero or concessional customs duty against an export obligation — on the zero-duty route, 6 times the duty saved over 6 years. The obligation is met through exports of the goods produced with the capital goods.
What is Advance Authorisation?
Advance Authorisation permits duty-free import of inputs — raw materials, consumables, and packaging — used in export products, with quantities benchmarked under the SION norms. The authorisation is issued on application (ANF-5A) and the inputs are to be used only for the authorised export products.
What happens if the export obligation is not met?
The scheme benefit is conditional on the export obligation. Where the obligation is not met, the duty benefit is liable to be recovered with interest, subject to the FTP's provisions — which is why the obligation tracker is part of the engagement, not an afterthought.
What should you send us before we start?
Send the IEC, the product and HSN details for the inputs and exports, the capital goods import plan with duty computations, and the export performance history. That is enough for us to select the scheme and compute the obligation.

Canonical reference: https://www.pvtltd.co/services/epcg-advance-auth

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We can help with the filing, the legal mapping, and the follow-up work that keeps the company compliant after submission.

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