Amnesty Scheme by DGFT for redemption of Advance Authorization and EPCG Scheme
The Directorate General of Foreign Trade (DGFT) has introduced one time amnesty scheme for those exporters who have obtained licenses under Advance Authorization and EPCG Scheme but are unable to fulfil the export obligation as required under these licenses.
This amnesty scheme provides for one time settlement of default in export obligation.
DGFT issues AA (Advance Authorization) and EPCG (Export Promotion Capital Goods) licenses to help save import duty. These Authorization or Licenses are issued subject to fulfilment of certain export obligations. If these Export obligations are met, the licenses are redeemed or can be cancelled. However, if the obligations are not met, the licenses are considered unredeemed. Exporters who fail to fulfill the export obligation are required to pay the previously saved duty along with interest.
To assist AA and EPCG license holders who were not able to fulfill their export obligations, a one-time amnesty scheme has been introduced by DGFT. It provides relief to those who are struggling to meet the requirements of their license.
Who is covered under One Time Amnesty Scheme 2023
Amnesty Scheme covers following Advance Authorization and EPCG Scheme Licenses
- Issued under Foreign Trade Policy 2009-14 till 31-03-2015
- Issued under Foreign Trade Policy 2004-09 & before, and whose Export Obligation period (original or extended) was valid beyond 12-08-2013.
It is to be noted that this one time Amnesty scheme is not applicable for Licenses that are issued Foreign Trade Policy 2015-2020
Relaxation Provided under the Amnesty Scheme
To regularise the default in fulfilling Export Obligation under the Amnesty Scheme, License Holders of Advance Authorisation (AA) and Export Promotion Capital Goods (EPCG) are required to pay Customs duties in proportion to the unfulfilled obligation, along with a maximum interest of 100% on the exempted duties that are subject to interest. It is important to note that no interest is payable on the Additional Customs Duty and Special Additional Customs Duty under the Amnesty Scheme.
No CENVAT Credit or Refund against the duties paid under Amnesty Scheme
You cannot claim Cenvat Credit for customs duties paid under the Amnesty Scheme. The scheme explicitly states that you cannot receive Cenvat Credit or a refund, under any law, for any amount paid under this scheme. Instead, you must agree by giving an undertaking not to file any application for CENVAT Credit or refund of any duty paid under the amnesty scheme before any authority or court.
How to apply for Amnesty Scheme
Step 1: Registration under Amnesty Scheme
Interested authorization holder shall first register himself on website https://dgft.gov.in through a separate application form provided for this purpose by filling all relevant details.
Step 2: Payment of Customs duty and interest under Amnesty Scheme
A. For Cases of Total Default
In case of total default, applicant can pay Customs duty plus interest with the Juridictional Customs authorities concerned and submit proof thereof to the Regional Authority of DGFT concerned.
B. For Cases of Partial Default
“In cases of partial default, the applicant shall first approach the Regional Authority of DGFT by submitting a special request. Based on the application filed for the Export Obligation Discharge Certificate along with necessary supporting documents, the authority shall inform the applicant of the default amount on which Customs duty and interest would be payable.
The applicant can then proceed to pay the Customs duty along with interest to the appropriate Jurisdictional Customs authorities and submit proof of payment to the concerned Regional Authority of DGFT.
Registration process for the DGFT Amnesty Scheme must be completed by June 30, 2023, and the payment of Customs duty and interest must be made to the relevant Customs authorities by September 30, 2023.
Step 3: Grant of EODC by DGFT
Once the Customs duty plus interest is paid to the relevant Jurisdictional Customs authorities, the License Holder can submit proof of payment and other required documents to the concerned Regional Authority (RA) for redemption of their Authorization. The RA will examine the request and issue an Export Obligation Discharge Certificate (EODC) letter if everything is in order.
Are Cases Under Adjudication or Appeal Covered under the Amnesty Scheme?
This Amnesty Scheme allows for the regularization of even those cases that have already been adjudicated, or are currently pending adjudication, either in the original hearing or in appeal.
For cases that have already been adjudicated, or are currently pending adjudication, and where no appeal has been filed, firms will need to provide a copy of the closure letter received from the concerned Regional Authority (RA) to the Adjudicating Authority.
In cases where an appeal has been filed, the closure letter must be submitted to the Appellate Authority.
Upon submission of the closure letter, the Adjudicating Authority or Appellate Authority will decide whether to close the case or appeal and will inform the appellant and the relevant RA accordingly.
Cases Not covered under the Amnesty Scheme
- If duty along with applicable interest has already been deposited, such cases would not be eligible for the Amnesty Scheme
- Cases that are currently under investigation, or have been adjudicated, for fraud , misdeclaration, or unauthorized diversion of material and/or capital goods, will not be eligible for the Amnesty Scheme.
