Economics Special: Export Promotion Capital Goods (EPCG) Scheme.

India had two variants of EPCG Scheme:

1.       Zero Duty EPCG for few sectors and

2.       3% Duty EPCG for all sectors.

In 2012, a new Post Export EPCG Scheme was also announced.

In 2013, the government has merged Zero Duty EPCG and 3% EPCG Scheme into one scheme which is now known as Zero Duty EPCG Scheme covering all sectors.

EPCG is a zero duty scheme which allows the import of capital goods such as machinery for preproduction, production and post production of export items.

But the duty free import by an exporter has to be paid back in the form of an export obligation equivalent to 6 times of duty saved on capital goods imported under EPCG scheme, to be fulfilled in 6 years reckoned from Authorization issue-date. This means that if an exporter imports a tool making machine and saves an import duty of Rs. 100, he will have make the tools and export tools worth minimum Rs. 600 within 6 years.

Economics Special: Merchandise Exports from India Scheme (MEIS)

It seeks to promote export of notified goods manufactured/ produced in India.

• MEIS is a major export promotion scheme of GOI implemented by the Ministry of Commerce and Industry.

• MEIS was introduced through the Foreign Trade Policy (FTP) 2015-20.

• MEIS is result of major consolidation and simplification: Earlier there were 5 different schemes for rewarding merchandise exports with different kinds of duty scrips (a form of credit) with varying conditions attached to their use. Now all these schemes have been merged into a MEIS.

• Duty credit scrips are freely transferable and usable for payment of custom duty, excise duty and service tax.

• Incentives under MEIS are available to units located in SEZs also.