Date For IGST & Compensation Cess Exemption on Imports by EoUs Revised

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The EPCG scheme was originally intended to give relief to exporters as they were not mandated to pay Integrated Goods and Services Tax (IGST) at the initial point

The government of India may have given some relief to exporters by extending the dates for ‘IGST & Compensation Cess exemption on Imports by Export Oriented Units (EoU’s)’ to 1st April 2022. The date for the same, earlier, was First April 2022.

“The Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 52/2003-Customs, dated the 31st March, 2003, published in the Gazette of India, Extraordinary, vide number G.S.R. 274 (E), dated the 31st March, 2003, namely:- In the said notification, in the opening paragraph, in the proviso, for the figures, letters and words “1st day of April, 2021”, the figures, letters and words “1st day of April, 2022” shall be substituted,” read an official statement released by the Ministry of Finance India.

Earlier, the exemption was till 31 March 2020 only. The Export Promotion Capital Goods (EPCG) scheme, as an export promotion scheme, allows an exporter to import certain amount of capital goods at zero duty. These are used for upgrading technology related with exports. Advance authorisation, on the other hand, allows duty free import of inputs. The same are then physically incorporated in the product to be exported.

The scheme was originally intended to give relief to exporters as they were not mandated to pay Integrated Goods and Services Tax (IGST) at the initial point. These exporters had to pay indirect tax and then seek refund under the GST regime. IGST, a part of the GST regime, is levied by the government on all Inter-State supplies of goods and/or services. It is applicable in both cases of import into India and export from India.

India, during fiscal 2020, imported electronics worth Rs 3.7 trillion (Statista). The value of electronic products exported from India amounted to over 829 billion Indian rupees during the same fiscal.

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