EPCES

About EPCES

INTRODUCTION

Export Promotion Council for EOUs & SEZs (EPCES) has been setup by Ministry of Commerce & Industry, Government of India, to service the export promotional needs of EOUs & SEZs in the country. Over the years, EPCES has made an endeavor to facilitate consultations between different stakeholders including industry, policy makers, bank, financial institutions and multilateral agencies to facilitate greater competitiveness in the Indian EOUs & SEZ sector.

EPCES is the only scheme specific & Multi-product Council and represents major industrial sectors, like Textiles, Garments &Yarn, Gem &Jewellery, Leather Goods, Food &Agro products, Electronics & software, Information Technology, Pharmaceuticals &Chemicals, Engineering, Minerals, Granites & other stones, Plastic &Rubber goods etc.

India was one of the first Asian country to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. During the period 1965 to 2000, 6 more EPZs were set up in the country viz. SEEPZ Mumbai, MEPZ Chennai, VEPZ Visakhapatnam, CEPZ Cochin, NEPZ Noida and FEPZ Kolkata and an EPZ was also set up in private sector i.e. Surat Special Economic Zones. Exports from EPZs in the year 1999-2000 were merely Rs.8000 crore (US$ 2 bn). Hence, the scheme was reviewed and a new SEZ Scheme was incorporated in the Foreign Trade Policy in the year 2000.

Keeping in view the importance of EOU/SEZ Sector a need was felt in the Department of Commerce to establish an Export Promotion Council exclusively for EOUs & SEZ Sector to service their export promotional needs. In this regard initiatives were taken by the Ministry of Commerce & Industry in consultation with the EOUs and SEZ Industry from all over the country and constitutional requirements were complied and Export Promotion Council for EOUs and SEZs (EPCES) was set up in in January, 2003 by Ministry of Commerce & Industry. EPCES has also been recognized by the Director General of Foreign Trade (DGFT), Ministry of Commerce & Industry, Government of India vide DGFT Public Notice No. 59/2002-7 dated 15.1.2003 and is registered under Societies Registration Act XXI of 1860.

Export Promotion Council in the country. Its objectives are:

To promote exports from India and to earn more foreign exchange for the country.
To facilitate interaction between the EOUs/SEZs community and Government both at the Central and State level.
To provide benefits of Market Access Initiative (MAI) Scheme rendered by the Central Government to Indian Exporters for assisting their export market development efforts.
To collaborate with other export promotion councils/ export promotion organizations in India and similar bodies in foreign countries as well as with international organizations working in the field.

ACTIVITIES OF EPCES

EPCES represents EOUs/SEZs Sector, which has approx. 7000 operational EOUs/SEZ Units/ SEZ Developers spread all over the country. EOU/SEZ Sector contribution 34% in the export basket to national exports. The activities of EPCES encompass:

Providing financial assistance to EOUs/SEZ units through Market Access Initiative (MAI) Scheme for export promotion activities abroad.
Organizing Open Houses/ Seminars/Workshops in different states of the country for resolving the problems of EOUs & SEZs and eliciting suggestions for policy making by Government.
Taking up issues affecting EOUs/SEZs with various Ministries like Commerce, Finance, CBEC, GST Council, CBDT, RBI, State Governments etc.
Participating in trade fairs/exhibitions in India & abroad.
Informing members about latest development and changes in the national and international trade scenario.
Publishing quarterly ‘EPCES News” focusing on marketing strategies, international scene, latest provisions and procedures relating to Export-Import, Customs & Excise, Investment Opportunities etc.
Bringing out publications for use within India and abroad.
Organizing buyer-seller meets with EOUs & SEZs for the promotion of exports.
Arranging Trade Delegations abroad for Export Promotion.
Conducting studies on various subjects viz. GST, Services Sector, OBU, EOU, and SEZs etc.

AREAS OF ACHIEVEMENTS OF EPCES

Export Promotion Council for EOUs and SEZs (EPCES) has been set up in January, 2003 to cater to the export promotional needs of 100% Export Oriented Units (EOU), Special Economic Zone (SEZ) Units and Special Economic Zone Developers in the Country.
EPCES has been recognized by the Ministry of Commerce, Government of India Vide DGFT Public Notice No. 59/2002-7 dated 15-1-2003 and registered with Registrar of Societies under Societies Registration Act XXI of 1860.
EPCES is the only Export Promotion Council which is scheme specific Export Promotion Council and is consequently a multiproduct Export Promotion Council.
EPCES represents EOU/SEZ Sector which cover major industrial sector, like textiles, garments & yarns, gems & jewellery, leather goods, food & agro products, electronics & software, pharmaceuticals & chemicals, engineering minerals, granites & other stones, plastic & rubber goods etc.EOU/SEZ Sector has approximately 6,000 operational EOU/SEZ Units/SEZ Developers spread all over the country. During the year 2002-03 the exports from EOUs and SEZs Sector was US $ 6.97 billion (Rs. 33,647/- crore) and the exports from EOU/SEZ Sector during the year 2018-19 was US $ 112 Billion (Rs. at Rs.7,88,551 crore). Within a short span of time of 16 years, EPCES has established its credentials as the only National level body representing EOU/SEZ sector for promoting exports from the country.
EPCES takes up EOUs/SEZs issues with various Ministries of Government of India, like Commerce, Finance, GST Council, CBEC, CBDT, RBI, State Governments etc. for promoting exports from the country and eliciting suggestions from its members for submission to Ministry of Commerce & Industry for formulation of Foreign Trade Policy.
Since its inception in 2003, this Council has organized approx. 70 Open House Meets of EOUs, SEZ Units and SEZ Developers with Hon’ble Commerce & Industry Minister, Government of India and Commerce Secretary, Government of India and other senior offices from Central and concerned State Governments all over the India at New Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Jaipur, Hyderabad, Coimbatore, Surat, Bangalore, etc. These Open House Meets have been organized for resolving the issues/ problems of EOU/SEZ Sector and to take suggestions from its members for submission to Ministry of Commerce & Industry for formulation of Foreign Trade Policy, Budget, SEZ Act and SEZ Rules. As a result, a number of issues of EOUs and SEZs have been resolved and the concerned Ministries have issued various notifications/circulars in this regard.
In order to encourage exports from EOUs/SEZ Sector, EPCES is continuing the process of distributing EPCES Export Awards for outstanding Export Performance to best EOUs/SEZ Units. EPCES Export Awards are presented by Hon’ble Minister for Commerce & Industry, Government of India/Hon’ble Minister of State for Commerce & Industry to the best EOUs and SEZ Units. This encourages EOUs and SEZ Units to increase their efforts for promoting exports from the country.
EPCES has been regularly publishing a book every year, which incorporates Notifications/Circulars, relating to EOUs, SEZ Units and SEZ Developers, issued by Central Board of Excise & Customs, Central Board of Direct Taxes, Director General of Foreign Trade and Reserve Bank of India updated SEZ Act & updated SEZ Rules. We send a complimentary copy of this book to all our members for their smooth day-to-day functions. We also send complimentary copies of this book to Ministry of Commerce, Ministry of Finance and State Governments. This helps in bringing about uniformity in procedures at all the places. In the last seven years this book has been of immense help to EOUs SEZ Units and SEZ Developers as well as field formations of Development Commissioners, Customs and Central Excise authorities. This Book has been released by Hon’ble Commerce & Industry Minister, Government of India and Commerce Secretary, Government of India.
EPCES has been regularly publishing its “EPCES News” containing a wide variety of topics and news items of interest to its various categories of readers in the country and also keeping its members abreast on International scene, latest provisions & procedures relating to Export-Import, Customs and Excise, investment opportunities etc. EPCES also inform its embers through EPCES News about the activities of the Council from time to time for their benefit.
SEZ Scheme is playing a very significant role in our economy in creating of the world class infrastructure, promotion of exports of goods and services and employment generation from the country.SEZ Act and Rules have been made operational with effect from 10-2-2006. Implementation of SEZ Act and SEZ Rules has provided stability and continuity to the SEZ Policy and the Act is helping in attracting foreign and domestic investments and in generating additional economic activity in the country. Various private SEZ Developers have come up for setting up new Special Economic Zones in the country. This has helped in bringing in huge foreign and domestic investments in this sector and generating employment in the country. Attracting Foreign Direct Investment is one of the stated objectives of SEZs and for this SEZ Scheme offers one of the best competitive package. Response to this scheme from national and international investors has been very tremendous and encouraging so far. Complete assistance and information is being provided to international and domestic investors in respect of investments in SEZs in India. EPCES has also published and updates SEZ Act and SEZ Rules and Brochures on SEZs from time to time for the benefit of potential SEZ Developers for setting up SEZs and units in SEZs.
EPCES, alongwith with its members participate in Trade fairs/exhibitions/Seminars abroad for promoting exports and bringing Foreign Direct Investments (FDI) for the country. This also increases mutual direct interactions among businessmen of India and foreign countries by identifying the areas of bilateral interest and investment and for building a strong image of the Small and Medium Industry products of Indian exporters overseas. EPCES has already participated in trade fairs/ exhibitions/ seminars at Russia, Jordan, Australia, Kenya, South Africa, Indonesia, Singapore, Taiwan, Panama, Chile, Bhutan, Mexico, Colombia, South Korea, UAE, Turkey, Mauritius, Germany etc.
EPCES also provides financial assistance to EOUs and SEZ units in the form of Market Access Initiative (MAI) Scheme for participation in trade fairs/exhibitions abroad. This helps EOUs and SEZ Units in increasing their exports from the country.
EPCES website www.epces.in has complete information about the Council and it’s activities like Forthcoming events i.e. Open Houses, Seminars, Trade Fair and exhibitions abroad, Road shows abroad etc. Members can also access archives and latest EPCES Circulars, Directory of Members, Detail information of EOU and SEZ Scheme including SEZ Act and Rules, Guidelines for Market Access Initiative (MAI) Scheme, Benefits of becoming member of the Council, procedure of becoming members of the Council, downloadable membership application forms along with necessary instructions, etc.
EPCES regularly sends circulars to its members for indicating latest changes/amendments in the Policy, Procedures, RBI instructions, Department of Revenue instructions etc. relating to EOUs/SEZs for the benefit of its members through EDI.
EPCES is a member of All India Export Advisory Committee of RBI and Standing Committee on Promotion of Exports by Shipping (SCOPE Shipping) and Air (SCOPE Air) of Ministry of Commerce & Industry.
The Council is performing all these activities with a limited staff strength of 8 persons.

Special Economy Zones (SEZs)

With Asia’s first Export Processing Zone (EPZ) being set up in Kandla in 1965, India became one of the first countries in Asia to recognize effectiveness of the EPZ model in promoting exports. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances, absence of world-class infrastructure, unstable fiscal regime and to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000.

This policy intended to make SEZs an engine for economic growth supported by quality infrastructure and complemented by an attractive fiscal package, both at the Centre and the State level, with the minimum possible regulations. SEZs in India functioned from 1st November 2000 to 9th February 2006 under the provisions of the Foreign Trade Policy and fiscal incentives were made effective through the provisions of relevant statutes.

Export Oriented units ( EOUs)

Some inherent limitations of the Export processing Zones/Free Trade Zone were noticed such as fixed geographical area, non-suitability for medium and large industrial units and for units which intended to set up manufacturing facilities near the source of raw material or specialised labour. EPZ were supplemented by Exported Oriented Units (EOUs). It provides freedom of location at a place of choice subject to long term commitment to exports under Customs Bond.

The EOU scheme was introduced in 1980. Subsequent refinements, modifications and fine-tuning coupled with liberalisation of Foreign Trade Policy, Customs and Excise laws and procedures and relaxation in export obligations have made EOU a popular scheme among exporting community. Details of the scheme are given in the Chapter-6 of the Foreign Trade Policy governed by Foreign Trade (Development and Regulation) Act, 1992.

Government has granted incentives to EOUs like exemption from Customs duties and Integrated Goods and Services Tax (IGST) on imports of goods as well as treating procurement of goods from DTA (Domestic Tariff Area) units as deemed exports.

However, post implementation of Goods and Service Tax (GST) effective 1st July 2017, upfront exemption of IGST on domestic procurement has been withdrawn for EOUs. The only benefit available to EOUs is exemption of Custom duties on import of raw material/ capital goods. In all other aspects, indirect tax incidence on EOUs is now at par with DTA units. For instance, EOUs are now required to pay IGST upfront on domestic procurement of goods and services and are eligible for refund of IGST paid on domestic procurement of goods through provisions governing deemed exports under GST law

SPECIAL ECONOMIC ZONE (SEZs)

An Area outside the Customs Territory of India.
Governed under the Special Economic Zones Act 2005 and Special Economic Zone Rule 2006.
A Single Window System of administration under Development Commissioner.
Duty Free import of goods (No Custom Duty, IGST, compensation Cess, etc).
No GST/Excise Duty/Central Sale tax on procurement of goods and services from Domestic Tariff Area(DTA).
Supply to DTA on payment of Customs Duty, IGST, etc as in case of imports.
Excellent Common Infrastructure facilities.

EXPORT ORIENTED UNIT (EOUs)

EOU can be set up anywhere in the country.
EOU scheme is governed under Chapter 6 of the Foreign Trade Policy and Handbook of Procedures.
It is like a Custom Bonded warehouse.
Minimum investment of Rs One crore in Plant & Machinery.
Duty free import of goods (No Custom Duty, IGST, compensation Cess, etc).
Supplies of goods from DTA is treated as “deemed export” and hence GST will be refunded.
Supplies to DTA on payment of GST / compensation cess. Duty benefits availed on inputs to be reversed.

MEMBERSHIP EPCES

Membership is Mandatory for EOU/SEZ Unit / SEZ Developer.
Any EOU/SEZ Unit / SEZ Developer can become a member of EPCES.
Please apply through the DGFT common online membership portal https://epces.- co.in/auth/login, https://www.dgft.gov.in- /CP/.
Members are entitled for
Free Monthly Trade Bulletin.
Free quarterly Newsletter.
Free EPCES query answering service (mail to : query @epcse.in).
Resolution of Issues with Government.

Export Promotion Council for EOUs & SEZs (EPCES)

Set Up by the Ministry of Commerce and Industry in January 2003.
A registered society dedicated to promoting exports from Special Economic Zones and Export Oriented Units.
Administered by an elected Central Governing Council (CGC) and 7 Regional Governing Councils, with elections held every two years.
A total of 5,971 members as of 31.03.2024, comprising 4,629 SEZ units, 958 EOUs, and 384 SEZ developers.
Vice Chairman is directly elected by all members every two years.
After serving a two-year term as Vice Chairman, the Vice Chairman is endorsed by the CGC to become Chairman for a further two-year term.

Activities of EPCES

Acting as a bridge between Industry and Government.
Addressing members’ queries related to SEZ Act/Rules, EOUs, Foreign Trade Policy, Indirect Tax, etc.
Taking up problems of EOUs / SEZs with various Ministries / Departments and agencies of Central and State Governments.
Organizing Open Houses / Seminars / Workshops / Webinars on areas of interest to members.
Organizing and participating in trade fairs/exhibitions in India & Abroad.
Organizing Buyer-Seller meets for promotion of exports.
Publishing regular trade bulletins, news-magazine, updated Act, Rules, FTP, etc.
Providing Financial Assistance to EOUs/SEZ Units through Market Access Initiative Scheme (MAI) for export promotion activities Abroad.
Issue of Non preferential Certificate of Origin to exporters.
Undertaking studies by experts on specific subjects relevant to members.

Achievements of EPCES in Addressing Problems of SEZs & EOUs

The Refund of Duties and Taxes on Export Products (RoDTEP) scheme has been extended to SEZs and EOUs via notification No. 70/2023 dated 08.03.2024. For EOUs, it is effective from 11.03.2024. In the case of SEZs, the scheme has been made effective from 01.07.2024, following the IT integration of SEZs with ICEGATE.
Mandatory Quality Control Orders issued by the Ministry of Steel, Ministry of Textiles, Department for Promotion of Industry and Internal Trade, and the Department of Pharmaceuticals and Chemicals have been exempted for imports by SEZs and EOUs for export purposes, as per DGFT notification No. 71/2023-24 dated 11.03.2024.
IT/ITES SEZs have been allowed to serve the Domestic Tariff Area through the insertion of new SEZ Rule 11B, by demarcating non-processing areas, as per notification No. GSR 881(E) dated 06.12.2023. Furthermore, following EPCES persuasion, clarifications have also been issued via Instruction No. 115 dated 09.04.2023.
Hybrid working under SEZ Rule 43A has been extended until 31.12.2024.
SEZ units have been exempted from the Safeguard Quantitative Restrictions imposed on the import of Isopropyl Alcohol, as per DGFT Policy Circular 4 dated 31.08.2023.
Zero-rating benefit will continue to be available for lease rental and other charges collected by developers from units for space utilized in creating employee welfare facilities exclusively for SEZ unit employees (Department of Commerce letter dated 03.10.2023).
SEZ units and EOUs have been exempted from the requirement of obtaining a “restricted import authorization” for the import of IT hardware restricted by Notification 23/2023 dated 03.08.2023. This exemption is allowed only for the captive consumption of the importing units (DGFT Policy Circular No. 6 dated 19.10.2023).
DGFT, via Notification No. 56/2023 dated 01.01.2024, amended Para 2.31 of the FTP, providing a special exemption from restrictions on the movement of used IT assets (Laptops, Desktops, Monitors, Printers) from SEZ to DTA.
IT/ITES developers have been permitted to install rooftop solar plants with fiscal benefits.

Key Pending Issues Taken up by EPCES

SEZ reforms, including the reversal of duty exemption on inputs for supplies made to the Domestic Tariff Area (DTA) (instead of paying full customs duties on finished products), allowing SEZ units to receive payments in INR for services supplied to the DTA, and streamlining job work between SEZ and DTA, are being addressed. These reforms, previously proposed in a new DESH Bill, are now being proposed through amendments to the existing SEZ Act and Rules.
Quick implementation of IT integration between SEZs and ICEGATE.
Extension of the RoSCTL scheme (Chapters 61 and 62) as notified by the Ministry of Textiles to SEZs and EOUs.
Reducing the compliance burden on SEZ units for transactions between SEZs and the Domestic Tariff Area (DTA) to ensure timely GST refunds for DTA supplies.
Addressing challenges faced by Free Trade Warehousing Zones (FTWZs), such as incorporating the clarification from SEZ Instruction No. 60 dated 06.07.2010 into SEZ rules, providing clarity on Permanent Establishment and double taxation, and ensuring that services rendered by FTWZ units to foreign suppliers are treated as export of services under IGST Sec 2(6) and considered a “zero-rated supply” under IGST Sec 16(1)(a)