EPCG – Spares Import

Introduction of EPCG – Spares Import

The EPCG – Spares Import facility under the Export Promotion Capital Goods (EPCG) Scheme allows exporters to import spares, components, tools, jigs, fixtures, and dies without paying customs duty. The objective of this scheme is to enhance India’s export competitiveness by allowing industries to upgrade their production technology and machinery without high import costs.

At BEST EXIM and Industrial Services, we provide specialized consultancy and end-to-end support for companies availing EPCG benefits for Spares Import, ensuring compliance with DGFT rules and Customs requirements while simplifying the entire process.

Understanding EPCG Spares Import Scheme

Under the EPCG scheme, companies can import spare parts, tools, jigs, fixtures, dies, moulds, and accessories that are essential for maintaining or upgrading existing capital goods. These spares are treated as part of the capital goods import and are eligible for zero customs duty under a valid EPCG Authorization.

This provision ensures that exporters can keep their production lines running efficiently without interruption, while maintaining export quality standards. Spares are crucial for industries such as engineering, pharmaceuticals, automotive, textiles, electronics, and food processing — where machinery uptime and precision are vital.

Purpose and Use of EPCG Spares Import

The EPCG Spares Import facility helps exporters maintain their production machinery in top condition by importing necessary parts without paying customs duty. It supports:

  1. Repair and Maintenance: Replacement of worn-out parts to ensure smooth functioning of capital goods.
  2. Technology Upgradation: Import of improved or advanced spares for better performance and productivity.
  3. Operational Continuity: Avoid downtime due to unavailability of critical machinery components.
  4. Export Quality Improvement: Maintain consistent product quality and meet international standards.
  5. Cost Optimization: Reduce operational costs by saving on customs duty and ensuring timely maintenance.

Eligibility for EPCG Spares Import

The following entities are eligible to apply under EPCG Spares Import:

  • Manufacturer Exporters with existing capital goods used in export production.
  • Merchant Exporters with supporting manufacturers.
  • Service Providers involved in export of services such as hotels, logistics, IT, and healthcare.
  • Common Service Providers (CSPs) catering to multiple export-oriented units.

Applicants must hold a valid Importer-Exporter Code (IEC) and meet the conditions of the Foreign Trade Policy.

Key Features and Conditions

  1. Zero Customs Duty: Spares, jigs, fixtures, and tools can be imported duty-free under a valid EPCG authorization.
  2. Existing Machinery Requirement: The applicant must have capital goods already installed and in use for export production.
  3. Export Obligation (EO):
    • EO is equivalent to six times the duty saved on the imported spares.
    • The EO must be fulfilled within six years from the date of issue of authorization.
  4. License Validity: EPCG license for import of spares is valid for 18 months from the date of issue.
  5. Installation Certificate: Imported spares must be installed within six months from the date of import, certified by a Chartered Engineer.
  6. No Transferability: Spares imported under EPCG cannot be sold, transferred, or disposed of before completion of export obligation.
  7. Technology Upgradation: Import of advanced spares for upgrading existing machinery is allowed under the EPCG scheme, subject to DGFT approval.

Export Obligation Explained

The export obligation ensures that companies availing benefits under EPCG contribute to India’s export growth. It is calculated as:

Export Obligation = 6 × Duty Saved on Import

The exporter must achieve the export obligation within six years from the date of license issuance. Exports of both physical goods and eligible services can be counted towards fulfilling this requirement.

Partial fulfillment is monitored annually, and failure to meet the obligation may result in payment of duty and penalties. With BEST EXIM and Industrial Services, our team ensures complete compliance and timely documentation to avoid any such issues.

GST and Import Benefits

  • Customs Duty: Exempt under EPCG authorization.
  • IGST: EPCG imports are exempted from IGST as per DGFT and Customs notifications, provided the license is registered at the port of import.
  • No GST Burden: Exporters using the EPCG route do not bear any GST cost on import of capital goods or spares.
  • Export Refund: Exporters can still claim IGST refund on exports of goods produced using EPCG-imported machinery and spares, ensuring double compliance and cost efficiency.

Benefits of EPCG Spares Import

  1. Duty-Free Imports: Save 100% customs duty on spares.
  2. Extended Machinery Life: Maintain production machinery efficiently.
  3. Cost Reduction: Reduce manufacturing and maintenance expenses.
  4. Improved Productivity: Enhance production speed and reliability.
  5. Export Competitiveness: Deliver high-quality products at lower costs.
  6. Compliance Advantage: Recognized under the Government’s FTP 2023 framework.

How BEST EXIM and Industrial Services Helps

We at BEST EXIM and Industrial Services provide end-to-end EPCG Spares Import consultancy, including:

  • Eligibility check and scheme guidance.
  • Preparation and submission of EPCG application with DGFT.
  • Coordination with Customs and other authorities.
  • Post-import compliance, documentation, and record maintenance.
  • Export obligation monitoring, submission, and license redemption.

Our expertise ensures quick processing, accurate documentation, and full compliance with EPCG and DGFT policies.

Conclusion

The EPCG Spares Import Scheme is an essential tool for exporters to maintain and upgrade their production infrastructure without extra costs. By importing spare parts duty-free, companies can enhance productivity, control expenses, and ensure continuous export performance.

With BEST EXIM and Industrial Services as your trusted EPCG partner, you gain a reliable ally for smooth documentation, end-to-end compliance, and successful license closure.

BEST EXIM and Industrial Services – Your One-Stop Solution for EPCG Spares Import and Export Growth.