EPCG/ Advance Licence Certificate
EPCG Certificate (Export Promotion Capital Goods Authorization) and Advance Licence (Advance Authorization) are export promotion schemes issued by the Directorate General of Foreign Trade to help Indian exporters reduce import costs. Both schemes allow duty benefits, but they serve different purposes.
| Particular | EPCG Certificate | Advance Licence (Advance Authorization) |
|---|---|---|
| Purpose | Duty-free or concessional import of capital goods (machines, equipment, tools) | Duty-free import of raw materials, components, consumables, and packing materials used in export production |
| Issued by | DGFT | DGFT |
| Main Benefit | Reduces import duty on capital goods | Exempts customs duties on imported inputs |
| Condition | Exporter must fulfill the prescribed Export Obligation (EO) | Exporter must use the imported materials to manufacture goods that are exported |
| Validity | As specified in the authorization and DGFT policy | As specified in the authorization and DGFT policy |
Key Difference
- EPCG is for importing capital goods such as machinery to manufacture export products.
- Advance Licence is for importing raw materials and inputs that are consumed in producing export goods.