What are the important points of the duty exemption scheme?
Under the Duty Exemption Scheme of the Export and Import Policy, there are two important schemes — Duty
Entitlement Pass Book Scheme (DEPB) and Advance Licensing Scheme (ALS). The rationale behind them is to
make available duty-free inputs, including packing materials both imported and locally made to exporters.

The objective of the DEPB is to neutralize the incidence of basic customs duty on the import content of export
products. This neutralization is provided by way of grant of duty credit against the export products at rates
announced by the DGFT from time to time. The DEPB licence is issued on both post and pre-export basis. The
DEPB licence is transferable, and all items except those appearing in the negative list of imports are allowed to
be imported. Credits earned under the DEPB can be utilized for payment of customs duty on any item imported
under SIL.

An Advance Licence is granted to a merchant or a manufacturer exporter for duty-free supply of domestic as
well as imported inputs required for the manufacture of export goods without payment of basic customs duty.
However, such inputs are subject to payment of additional customs duty equal to the excise duty at the time of
import.

Advance licences are issued on the basis of production programmes of regular exporters and also on specific
export order subject to fulfillment of a time-bound export obligation both in terms of quantity as well as value.
The licence is issued on the basis of a minimum value of 33 per cent, which may be reduced up to 25 per cent
in exceptional cases.

What does the EPCG cover?
The EPCG (Export Promotion Capital Goods) scheme is an export-promotion instrument under which capital
goods, new and second-hand, can be imported subject to fulfillment of specified export obligation. Under this
scheme, two windows are available — zero import duty and duty at a concessional 10 % rate. If a computer
system is imported under this scheme, supporting manufacturers and service providers are also eligible to
import capital goods.

What is an Open General License?
Under the Open General Licence (OGL) scheme, import of certain goods is permitted without any licence.
Earlier, EXIM policies necessitated elaborate procedures even for import of items under the OGL. Most items
have now been placed under OGL, and only a limited number of items come under other lists —negative list of
imports, restricted list and canalized list for both import and export.

What are the Other Lists?
The restricted list covers certain consumer goods, precious, semi-precious and other stones, items of safety
and security, seeds, plants and animals, insecticides and pesticides, drugs and pharmaceuticals, chemicals and
allied items and a few other products. These items are allowed to be imported and exported on restricted basis
as specified in the EXIM policy.

The negative list contains items not allowed to be imported or exported. However, some of these are allowed to
be imported and exported through canalizing agencies.