DGFT Clarification reg. Definition of Service Provider under EPCG Scheme

DGFT Clarification reg. definition of service provider under Common Service Providers (CSP) in EPCG Scheme

The DGFT has clarified the issue whether EPCG authorizations can be issued to a person who does job work for the exporter of goods, as a Common Service Provider (CSP), as under:

DGFT Trade Notice No. 18/2016 dt. 23 Sept. 2016 F.No. 18/03/AM-17/PC-5

1. The issue has arisen whether EPCG authorizations can be issued to a person who does job work for the exporter of goods, as a CSP under para 5.02 read with para 1.35 of Foreign Trade Policy (FTP) 2015-20.

2. In light of Para 9.00 of the FTP 2015-20 which states as under:

“For purpose of FTP, unless context otherwise requires, the following words and expressions shall have the following meanings attached to them”

and in terms of para 2.57 of the FTP 2015-20, it is hereby clarified that in the context of common service providers under the EPCG scheme dealt with in Para 5.02 of the FTP the definition of service provider includes job workers of the type illustrated in the example below.

Example – there may be multiple garment exporters obtaining services at different stages of garment manufacturing (such as knitting, dyeing, compacting, printing, embroidering, labelling, cutting etc.) from a number of other units who own these facilities but do not engage in the export of garments. The arrangement gives flexibility to exporters to not own all the infrastructures for conversion from input to final export products.

3. In such cases the provisions of DoR exemption Notification no. 16/2015 Customs are to be complied with.

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