Negative list of capital goods under EPCG scheme

In our previous blog post, "Export Promotion Capital Goods (EPCG) - Scheme, Objectives, Issuance, and Redemption," we explored the provisions of the EPCG Scheme in detail.

In that blog, we had examined what is considered as “capital goods” under the EPCG Scheme. Capital Goods is defined under para 11.08 of the Foreign Trade Policy.

Now, we will examine the capital goods which are not allowed for import under the EPCG Scheme or which are allowed for import under the EPCG Scheme only under specific conditions.

The Directorate General of Foreign Trade (DGFT) has notified this list in Appendix 5F notified vide Public Notice No.47 dt.06.12.2017. The said Appendix 5F is given below for ready reference. Importability under EPCG Scheme is given against each item in the table below :-

Appendix 5F

Sr. No.	Name of Item	Importability under EPCG Scheme
1.	Cables	Permitted only as an integral part of Capital Goods
2.	Railway wagons (excluding specialized Tractors)	Not Permitted
3.	Tractors	Not Permitted
4.	Trucks / Tippers / Dumpers and spares thereof including Lyres.	Permitted only to mining sector
5.	Motor Cars, Sports utility Vehicle / All purpose vehicles	Not Permitted
6.	Airport Ground Handling Equipments	Not Permitted
7.	Furniture, carpets, crockery, marble, chandelier, tiles, flooring, doors for rooms, fixing panels.	Permitted only to Hotel Industry
8.	Construction equipment viz. Cranes etc.	Permitted only for providing services.
9.	All construction material like sheds, cement, steel.	Not Permitted
10.	Computer and Printers	Not Permitted
11.	All seconds Hand Capital Goods	Not Permitted
12.	Capital Goods (including Captive plants and Power Generator Sets of any kind) for export of electrical energy (power); Supply of electrical energy (power) under Chapter 7; Supply of power (energy) in their own unit, and Supply / export of electricity transmission services.	Not Permitted
13.	Pre-fabricated Polyurethane Foam (PUF) panels/doors	Permitted for use in (i) Chilled Rooms and (ii) Cold Storages set up by the Processing Units for storage of pre- frozen and frozen marine products respectively, meant for exports under the EPCG Scheme
14.	Furniture and fixtures, flooring materials and furnishing materials.	Not Permitted
15.	Pre-fabricated Polyurethane Foam (PUF) panels/doors	Permitted for use in (i) Chilled Rooms and (ii) Cold Storages set up by the Units for storage of fresh fruits and vegetables, meant for exports under the EPCG Scheme

The above list may readily referred to check the importability of a particular item under the EPCG Scheme.

Conclusion

In conclusion, understanding the specific provisions and restrictions under the EPCG Scheme is crucial for businesses aiming to leverage this scheme for importing capital goods. The list provided in Appendix 5F serves as a valuable reference for determining which items are eligible for import under this scheme and under what conditions. By carefully reviewing these guidelines, businesses can ensure compliance with the EPCG Scheme, optimize their import strategies, and avoid potential pitfalls. This clarity not only aids in better planning but also aligns with the broader goals of promoting exports and enhancing competitiveness in international markets.

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