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In light of the economic slowdown caused by the COVID-19 pandemic, the commerce ministry has given a one-time relaxation for exporters from hotel, healthcare, and educational sectors with respect to maintaining the average export obligation under the Export Promotion Capital Goods (EPCG) scheme. Under the scheme, imports of capital goods are allowed duty free, subject to an export obligation.

It added that this relief will help the hotel, healthcare and educational sectors to cope with the negative impact of the pandemic on their export activities. For 2020-21 and 2021-22, these sectors will not be required to maintain the average export obligation for EPCG authorisations issued to them. These sectors will also have the option to extend the export obligation period for a longer duration without having to pay any additional fees.

It further said ‘This extension will be granted without payment of composition fees. However, for EPCG authorisations issued for sectors other than hotel, healthcare and educational, the export obligation period may be extended for the number of days the existing export obligation period falls within February 1, 2020 and July 31, 2021’. In such cases, the extension will be granted without payment of composition fees, but with a 5 per cent additional export obligation in value terms on the balance export obligation as on March 31, 2022.

The scheme aims to encourage the production of goods for export by providing import duty concessions on capital goods. It is administered by the Directorate General of Foreign Trade (DGFT) and is governed by the Foreign Trade Policy of India.