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EPCG License configuration

Former Member
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Dear Experts,

I would like to implement EPCG license implementation, and have gone through the SDN threads in which it is mentioned that SAP has not provided the solution for EPCG and we need to go for Z devlopment.

so i would like to write down the whole document which i have been received from Client. kindly give me some insight about how to handle the situation based on the belos stated document

Client is having Exports & Deemed exports processes.

The excise duty and customs duty paid on inputs and service tax paid on input services is given back to the exporter of finished product by way of ‘duty drawback’.

Export incentives- Check?

EPCG license (export obligation) tracking required if Capital Goods are imported under EPCG license.

While taking EPCG license based on the previous export history, the export limits setup up to 8 yrs.

Tracking required for as per below details

Export Obligation

Current exports

Minimum export

export obligation

Duty balance

Interest calculation

17 lacs

8

6

2

2

Formula applied

15 lacs

3

6

nil

15 lacs

9

6

3

13 lacs

Specific Points:

  • Export obligation includes direct export and deemed export transactions.
  • EPCG license having  export obligation defined in limited years ex 8 years , analysis required  year wise export sales vs. obligation ratio of EPCG, how much duty paid saved and interest paid.
  • When export takes place the reference no of EPCG license data need to be captured, Documentation data, Ratio proportionate details reporting.
  • FIRC (Foreign Inward Remittance Certificate) is one of the important documents to be submitted to DGFT as a proof of export made.( check possibility for Shipping  document/ Invoice)

Accepted Solutions (0)

Answers (1)

Answers (1)

Former Member
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Experts,

Kindly provide some insights about the above thread

regards

Shibu

Lakshmipathi
Active Contributor
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You have listed two export incentives, viz. EPCG and Drawback which are different.  You should be aware EPCG is on the Capital Goods whereas, Drawback can be availed if the plant has imported some component which would then be added to export salable material.  Check with the Business whether both the declarations can be shown in one billing document.  Accordingly, you can build the logic.

Coming to the requirement, it will be very difficult to explain the logic here as the formulae to arrive the EPCG value, is little bit complicated.   First of all, apart from the columns you have listed, you also need to have fields for EPCG licence number, Valid from, Valid to,  billing document reference, billing document value.


Meanwhile, you also check with the Business, what are the fields they would like to capture in the report and you have to integrate MM with SD since from MM part,  some amount would have been paid by way of Landing Charges, Basic Duty, C.V. on Duty and other Customs charges.  So you have to capture all these amount to zee table with some user exit.  Definitely, this should be a challenging task for you

Based on the above zee table, as and when, billing document is saved, system should update the above zee table also.   If I am correct, EPCG obligation would be eight times of duty saved amount.  So the Business have to provide what is duty saved amount and you need to capture all these data into zee table.

I am sure, this development will take couple of months and quite challenging too.  As a first step, start with some development and update here if you are stuck with anywhere.  I will try to assist you with the exposure I have since long time back, I have handled but with some Third Party Vendor but now literally, out of my memory.

G. Lakshmipathi

Former Member
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Sir,

I consulted the same issue with one of my cuosins, who suggested me that SAP has introduced solution for handling the EPCG license configuration very recently.

what do you suggest, should i go for writing to SAP ?

if they provide proper solution then we can move without any unnecessary development.

Regards

Shibu Chandran

Lakshmipathi
Active Contributor
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SAP has introduced solution for handling the EPCG license configuration very recently.

Quite interesting !!!!!!!!!!   Please check with SAP and share it here if any note is released to this effect. 

G. Lakshmipathi

Former Member
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Please update the thread if any one has recent solution for the same