Authorisations, export obligation, remission and drawback, registrations and the proceedings that follow a shortfall. Scheme strategy before the commitment, and representation once the Regional Authority has written.
An advance authorisation or an EPCG authorisation is a duty saving today and an obligation for years afterwards. Which scheme fits depends on the export profile, not on which one is easier to obtain.
Most proceedings in this area are shortfall proceedings. Nearly all of them are cheaper to deal with before the obligation period expires than afterwards.
Remission schemes and drawback are where a large part of an exporter's margin sits, and where a small procedural error becomes an irrecoverable loss.
The importer exporter code, registration cum membership, and status holder recognition all carry conditions that quietly lapse if nobody is watching.
Adjudication under the Foreign Trade Act runs alongside a Customs demand on the same facts. Fighting them separately is how businesses lose both.
Choosing between schemes, or running two together, is a modelling question. The right answer changes with the export horizon and the capital goods cycle.
| What | How long | From | Source |
|---|---|---|---|
| Advance authorisation, export obligation period | Eighteen months, extendable | Date of issue | Handbook, paragraph 4.42 |
| EPCG, first block | Half the obligation in four years | Date of issue | Handbook, paragraph 5.14 |
| EPCG, full obligation | Six times the duty saved over six years | Date of issue | Policy, chapter 5 |
| EPCG, installation certificate | Six months, extendable | Completion of import | Handbook, paragraph 5.04 |
| EPCG, annual report on fulfilment | By the thirtieth of April each year | The financial year | Handbook, paragraph 5.15 |
| Importer exporter code | Updated between April and June every year | Each financial year | Policy, paragraph 2.05 |
| Supplementary drawback claim | Three months, extendable | The original claim | Rule 16, Drawback Rules 2017 |
| Appeal against an order | Forty five days | Service of the order | Section 15, FT(D&R) Act 1992 |
The policy and the handbook are amended by notification and public notice through the year. Confirm the paragraph in force for your authorisation. The limitation calculator carries these periods.
Extension before expiry is routine and inexpensive. Regularisation after expiry is neither. This one difference accounts for a large share of what these proceedings cost.
Shipping bills have to carry the authorisation details for the exports to count. Exports that were made but not declared against the authorisation are the commonest cause of a shortfall that is not a real shortfall.
The same shortfall produces a duty demand from Customs and a proceeding from the Regional Authority. What is conceded in one is used in the other, so they are run together or not at all.
Where there is a genuine shortfall, the cost of regularising is usually far below what the notice proposes. Working that number out early changes the whole negotiation.
An advance authorisation and an EPCG authorisation solve different problems. One is for inputs against a confirmed export, the other is for capital goods against a multi year commitment. Choosing on the basis of which is easier to obtain is how businesses end up with an obligation they cannot meet.
Rates and eligibility under the remission schemes are revised by notification, and coverage has changed for units under other schemes more than once. Confirm the rate and the eligibility applicable to the shipping bill date rather than the current schedule.
Older incentive schemes have been discontinued and their amnesty windows have closed. Where an old benefit or an old default is still in your file, the position now is different from the position then, and it needs checking rather than assuming.
Apply for extension before it expires. That is the cheap option and it is usually available on the terms set out in the handbook. Once the period has lapsed, you are into regularisation, which means paying the proportionate duty saved with interest, and it costs several times more.
This is the commonest problem in this practice, and it is often fixable through amendment of the shipping bills, subject to the conditions and the period for such amendment. It is fixable much more easily early than late.
They are separate proceedings on the same facts, and they feed each other. They are handled as one position, because a concession made to close the smaller one is produced in the larger.
The policy requires an annual update between April and June each year even where nothing has changed, and codes that are not updated are liable to deactivation. Reactivation is possible but it stops your consignments in the meantime, which is the actual cost.
A first conversation costs you nothing but the hour, and it is where we tell you honestly whether the matter needs us at all.