Businesses engaged in international trade often rely on government schemes that reduce import costs and improve export competitiveness. Two such important schemes are the EPCG License EODC process and the Advance License facility. Both provide significant benefits for exporters, but they work differently and serve specific needs. Understanding their purpose, eligibility, and compliance requirements is essential for maximizing the benefits.
What is EPCG License EODC?
The Export Promotion Capital Goods (EPCG) scheme allows exporters to import capital goods at zero or reduced customs duty, provided they commit to export obligations. Once the export commitment is fulfilled, the exporter must apply for an EPCG License EODC (Export Obligation Discharge Certificate). This certificate is proof that the export obligations have been completed successfully. Without this certificate, the license remains pending, and businesses may face penalties.
Applying for the EPCG License EODC involves submitting documents such as shipping bills, e-BRCs, and statements of fulfilled obligations to the Directorate General of Foreign Trade (DGFT). Timely application ensures smooth closure of the license and prevents interest or penalty charges.
Understanding Advance License
The Advance License, also known as Advance Authorisation, is designed for exporters who need to import raw materials duty-free for the purpose of manufacturing export products. This scheme helps reduce input costs and boosts price competitiveness in global markets. Unlike the EPCG scheme, which focuses on capital goods, the Advance License is applicable for consumables, inputs, and components used in manufacturing.
Exporters using an Advance License must meet their export obligations within the stipulated time frame. Non-compliance can lead to demand for duties along with interest, making it important for businesses to plan exports carefully.
Key Differences Between EPCG License EODC and Advance License
Objective: EPCG focuses on duty-free import of capital goods, while Advance License covers raw materials and consumables.
Closure Requirement: EPCG requires obtaining an EPCG License EODC, while Advance License holders need to submit proof of export completion.
Users: Large manufacturers importing machinery often prefer EPCG, while exporters dependent on imported inputs use Advance License.
Benefits for Exporters
Both schemes offer critical advantages:
Cost Reduction – Duty exemptions lower production and machinery costs.
Global Competitiveness – Lower costs translate into better pricing in international markets.
Business Growth – Compliance with EPCG License EODC and Advance License conditions opens opportunities for repeat benefits under DGFT policies.
Compliance and Best Practices
Exporters should maintain accurate documentation of imports and exports, track timelines, and apply for closure of licenses promptly. Seeking professional help for EPCG License EODC filing or Advance License obligations can save businesses from penalties and delays.
Conclusion
Both EPCG License EODC and Advance License schemes play a vital role in India’s export ecosystem. While one supports investment in machinery, the other ensures cost-effective sourcing of inputs. Exporters who leverage these schemes correctly can enjoy reduced costs, improved margins, and a stronger presence in international trade.
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