How to Redeem Your EPCG License: A Step-by-Step Guide

 

🚢 What is EPCG License Redemption?

The Export Promotion Capital Goods (EPCG) scheme allows Indian exporters to import capital goods at zero or concessional customs duty, provided they fulfill a specific export obligation.

However, importing the machinery is just step one. To complete the EPCG cycle, you must undergo EPCG License Redemption—a crucial compliance step to prove that you met your export obligation.

In simpler terms: You get machinery at reduced cost now, and in return, you promise to export goods worth 6x the duty saved over 6 years. Redemption is the process of closing that loop with the DGFT.

🧾 What is Norms Fixation?

Before applying for redemption, many exporters need to undergo Norms Fixation—especially if they are using imported raw materials under Advance Authorization or combining EPCG with other export schemes.

Norms Fixation determines the input-output ratio for your product—i.e., how much raw material you're allowed to use per unit of export. It's done through the Norms Committee at DGFT and is critical if:

• Your product isn’t listed in SION (Standard Input Output Norms)

• You’re a first-time exporter

• Your export process is unique or specialized

Without a fixed norm, you can’t claim duty exemptions or properly proceed with EPCG License Redemption.

📋 Key Steps in EPCG License Redemption

To ensure smooth closure of your EPCG license, follow these steps:

1. Complete Export Obligation:

   Ensure your exports (as per shipping bills) match or exceed 6x the duty saved.

2. Prepare Documentation:

   • Export realization certificates (BRCs)

   • Customs duty details

   • Installation certificate of capital goods

   • CA-certified statement of exports

   • Norms Fixation approval (if applicable)

3. Online Application on DGFT Portal:

   File the redemption request via the DGFT online system using your IEC and DSC.

4. Await Closure/Redemption Letter:

   Upon verification, DGFT will issue an EODC (Export Obligation Discharge Certificate), officially closing your license.

🧠 Pro Tips for Hassle-Free Processing

• Start Norms Fixation early—delays here can stall your redemption.

• Use an experienced consultant to avoid documentation errors.

• Monitor export obligations proactively to avoid penalty interest or license cancellation.

• Keep records organized and ready for inspection at any time.

📞 Final Thoughts: Don't Let Compliance Hold You Back

Whether you're a seasoned exporter or just starting out, understanding the EPCG License Redemption process and Norms Fixation is essential for long-term export growth and regulatory compliance.

Failure to redeem your EPCG license can lead to heavy penalties—but with the right support, it’s just another milestone in your export journey.