Paragraphs 5 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
This article is on the Handbook of Procedures only; these paragraphs have no Policy paragraph of their own beyond paragraph 5.04(m) of the Policy, which says extension of the export obligation period is permitted as prescribed in the Handbook. Paragraph 5.15 deals with imports above or below the duty saved shown on the authorisation, paragraph 5.16 with extension of the export obligation period and its fees, and paragraph 5.19 with an export ban.
The procedure is taken from Chapter 5 of the Handbook of Procedures, 2023 as published on the DGFT website (file of July 2026), consulted on 2 October 2026. Later Public Notices should be checked. If a deadline in this article has passed on your authorisation, our legal consultation service can help you plan the regularisation.
Paragraph 5.15: imports up to 10% above the duty saved are deemed enhanced automatically; more than 10% needs the RA, with additional Bank Guarantee or LUT; less than the duty saved reduces the obligation pro rata. Paragraph 5.16: two extensions of one year each, or two years in one go, beyond six years, on a composition fee of Rs. 20,000, Rs. 30,000 or Rs. 60,000, with late fees of Rs. 10,000 and Rs. 15,000; no extension beyond 8 years under that provision. Paragraph 5.19: an export ban extends the period automatically, without any composition fee.
Paragraph 5.15: automatic change of up to 10% in the duty saved amount
If the authorisation has been used for import:
- (a) in excess of the duty saved amount shown by not more than 10%, the authorisation is deemed enhanced by that proportion. Customs automatically allows clearance without endorsement by the RA. The holder furnishes an additional fee to cover the excess imports, in terms of duty saved, to the RA when applying for the Export Obligation Discharge Certificate (EODC). The export obligation stands enhanced proportionately.
- (b) in excess by more than 10%, the RA, under its delegated powers, may allow enhancement of the duty saved amount, and the holder furnishes additional Bank Guarantee or LUT to the Customs authority.
- (c) less than the duty saved amount shown, the export obligation stands reduced pro rata to actual utilisation.
The paragraph does not state the amount of the "additional fee" in (a). It is silent on it, so check the RA's practice at the time of the EODC application.
Paragraph 5.16: extension of the export obligation period
(a) Extension for an authorisation issued before the Notification of the Foreign Trade Policy 2023 is governed by the Handbook provisions applicable on the date of issue.
(b) For extension beyond 6 years, the RA may consider two extensions of one year each, from the date of expiry, or two years in one go, at the holder's choice, with a composition fee by duty saved value:
| Duty saved value of the EPCG Authorisation issued | Composition fee |
|---|---|
| Up to Rs. 2 Crores | Rs. 20,000 |
| More than Rs. 2 Crores to 10 Crores | Rs. 30,000 |
| Above Rs. 10 Crores | Rs. 60,000 |
No refund of an earlier paid composition fee is admissible.
(c) Timing and late fees. The request is made to the RA within 6 months from the date of expiry of the original export obligation period. The RA may consider a request received after 6 months, but within the extendable validity of the period, with a late fee of Rs. 10,000. A request for extension for regularisation purposes, from the 6th to the 8th year, may also be considered after expiry of the period on payment of a late fee of Rs. 15,000. This fee is in addition to the composition fee that may be payable on account of shortfall in export obligation. Extension beyond 8 years from the date of issue of the authorisation is not allowed by the RA under this provision.
(d) Sub-paragraphs (b) and (c) also apply to authorisations issued under FTP 2015-20, notwithstanding sub-paragraph (a).
(e) Committee decisions. For implementing all decisions of the committee the paragraph calls "PRC" that involve a composition fee while allowing extension in the block-wise or export obligation period, or regularisation of exports already made, the fee is:
| Duty saved value | Composition fee |
|---|---|
| Up to Rs. 2 Crores | Rs. 30,000 |
| More than Rs. 2 Crores to 10 Crores | Rs. 60,000 |
| Above Rs. 10 Crores | Rs. 1,00,000 |
No refund of an earlier paid composition fee is admissible. The paragraph does not spell out the committee's full name or how a case reaches it.
(f) A dated relaxation that has lapsed. Where the original or extended export obligation period expires during 01.03.2026 to 31.05.2026, it stands automatically extended up to 31.08.2026, notwithstanding paragraph 5.16. The chapter file names Public Notice 51/2025-26 dated 06.03.2026 in its footnotes. The relaxation was time-bound and its last date has passed; it is not the standing rule. Footnotes also record that sub-paragraph (b) was amended and sub-paragraph (e) added by Public Notice 15/2024-25 dated 25.07.2024.
Paragraph 5.19: automatic extension on a ban on the export product
Whenever a ban or restriction is imposed on export of any product, the export obligation period of EPCG authorisations already issued before the ban on that product stands automatically extended for a period equal to the duration of the ban, without any composition fee. The holder is also not required to maintain the average export obligation for the ban period. Whether a product is restricted or banned for export is read from the item's entry in ITC(HS); this article does not say which products are.
How the paragraphs fit
| Situation | Paragraph | What it provides |
|---|---|---|
| Imported a little more than the duty saved shown | 5.15(a) | Up to 10% deemed enhancement, proportionate obligation |
| Imported much more | 5.15(b) | RA may enhance, with additional BG or LUT |
| Imported less | 5.15(c) | Pro rata reduction of the obligation |
| Obligation period over, extension wanted | 5.16(b), (c) | Two one-year extensions, fees, late fees, ceiling of 8 years |
| Product banned for export | 5.19 | Automatic extension, no fee |
Example with invented names
Greenfield Foods Ltd's EPCG authorisation shows a duty saved value in the band "above Rs. 10 Crores". Its original period ends, and it asks for extension more than 6 months later but within the extendable validity. Under paragraph 5.16(c) the late fee is Rs. 10,000; the composition fee for two one-year extensions under paragraph 5.16(b) is Rs. 60,000. If its request is for regularisation from the 6th to the 8th year, the late fee is Rs. 15,000. The late fee is in addition to any composition fee on shortfall. No extension goes beyond 8 years from issue under this provision. If the export product is banned in the meantime, paragraph 5.19 adds a period equal to the ban, without any composition fee.
Cross-references
Block-wise extension in the first block is in our article on paragraphs 5.13 and 5.14 of the Handbook. The Policy's counting rules are in paragraphs 5.04 and 5.08. For the general scheme see EPCG Scheme: Six Times Duty Saved, and the Average Export Obligation. The Handbook is issued under section 6 of the Foreign Trade (Development and Regulation) Act, 1992, and the Policy rests on section 5.
Need help with an EPCG extension?
Which fee applies, whether the six-month window is still open and what else is pending on the authorisation are questions worth checking before a request goes in. Our legal consultation team can walk through the authorisation file with you.
Key takeaways
- Paragraph 5.15(a): up to 10% over the duty saved is deemed enhanced; obligation rises proportionately.
- Paragraph 5.15(c): lower utilisation reduces the obligation pro rata.
- Paragraph 5.16(b): two extensions of one year each, or two years in one go, on a fee of Rs. 20,000, Rs. 30,000 or Rs. 60,000.
- Paragraph 5.16(c): late fees Rs. 10,000 and Rs. 15,000; no extension beyond 8 years under it.
- Paragraph 5.16(f): the extension to 31.08.2026 was time-bound and has passed.
- Paragraph 5.19: automatic extension for the duration of an export ban, without composition fee.
Read next
- Paragraphs 5.13 and 5.14 of the Handbook of Procedures, 2023: block-wise fulfilment of EPCG export obligation
- Paragraphs 5.20 to 5.25 of the Handbook of Procedures, 2023: EPCG EODC, default, re-export and clubbing
- Paragraphs 5.04 and 5.08 of the Foreign Trade Policy, 2023: EPCG export obligation
- EPCG Scheme: Zero-Duty Capital Goods for Exporters
Disclaimer: Based on the chapter-wise text of the Foreign Trade Policy, 2023 and the Handbook of Procedures, 2023 published on the DGFT website, and on the later Notifications named in this article, as consulted on 2 October 2026. The copies carry no "updated up to" date. Notifications, Public Notices, Trade Notices, the ITC(HS) schedules, Appendices and forms change often; the current text on the DGFT website should be checked before acting. This article is general information, not legal advice; check the official text before acting.