Overview
EPCG closure, surrender or regularisation is the final stage of the Export Promotion Capital Goods (EPCG) Scheme under Chapter 5 of the Foreign Trade Policy (FTP) 2023. Closure is evidenced by an Export Obligation Discharge Certificate (EODC) issued by the Directorate General of Foreign Trade (DGFT) once the export obligation stated in the EPCG licence has been fulfilled.
Surrender is different from closure: it applies where the authorisation holder is unable to utilise the licence, i.e. the capital goods mentioned in the licence were never imported. In effect, surrender means voluntarily giving up the authorisation. Regularisation is a third route, available where the export obligation has not been fulfilled, in full or in part, within the Export Obligation Period; the license holder regularises the shortfall against the proportionate duty-saved value, by paying duty along with applicable interest.
The purpose behind all three routes is the same: your bond or bank guarantee will not be released until one of them is completed. If the EPCG is not closed properly, it becomes a compliance issue and a standing liability, with the possibility of interest and penalty. Closing the authorisation after fulfilment of export obligation is mandatory, not optional.
It is best to choose the option that suits your specific situation from among closure, regularisation and surrender — each delivers a different financial outcome. Related authorisations are frequently used alongside EPCG, so if you also import duty-free inputs under an Advance Authorisation, keeping both compliance tracks aligned avoids conflicting timelines. A valid Importer Exporter Code (IEC) and awareness of the broader DGFT Services landscape also help while closing out an EPCG file.
We at Kireeti Group provide end-to-end support for EPCG closure, from monitoring your export obligation position through to EODC filing, regularisation computations, surrender applications, deficiency-letter responses and post-EODC follow-up with Customs for bond and bank guarantee release.
Key facts on EPCG closure
- Purpose of EODC: EODC is not a new benefit under the EPCG Scheme; it is the formal closure process for an existing authorisation once the prescribed export obligation and other applicable conditions have been fulfilled.
- Administering authority: the processing authority for EODC applications is the DGFT regional authority. Bond cancellation, release of bank guarantee and recovery of customs duty are matters handled by the Customs authorities.
- Default interest rate: as per the Customs Act, 1962, the applicable interest rate — currently 15% per annum — is payable on the proportionate duty-saved value for any unfulfilled export obligation.
- At-a-glance benefit of proper closure: a proper closure leads to cancellation of the bond and release of the bank guarantee submitted at registration, and removes the contingent liability of duty-plus-interest from your books.
- Core condition: you need to support fulfilment of your export obligation with copies of shipping bills and e-BRCs for EODC processing, or duty plus interest may be levied.
Three distinct exit routes
Every EPCG authorisation eventually needs one of three exits. The route that suits your situation depends on how much of the export obligation has actually been fulfilled, and whether the capital goods were imported at all.
EODC closure
Applicable where the export obligation has been fulfilled in full, supported by shipping bills and e-BRCs. This is the cleanest exit, releasing the bond/bank guarantee with minimal or no interest liability.
Regularisation
Applicable where the export obligation is unfulfilled, wholly or partially, within the Export Obligation Period. The shortfall is regularised against the proportionate duty-saved value, with duty and applicable interest (currently 15% p.a.) paid.
Surrender
Applicable where the licence was never utilised, i.e. the capital goods named in the authorisation were not imported. This is a voluntary relinquishment of the authorisation, not an escape route from an active export obligation.
- If your export obligation is fully met and supported by shipping bills and e-BRCs, then our EODC closure filing service is relevant.
- If your export obligation has been only partially fulfilled, or not fulfilled at all, within the Export Obligation Period, then our regularisation service is relevant.
- If you never imported the capital goods named in your authorisation and want to relinquish it, then our surrender filing service is relevant.
- If your export performance is spread across multiple EPCG authorisations and you want to close them together, then our EODC clubbing service, subject to DGFT's clubbing conditions, is relevant.
- If DGFT has raised a query, deficiency letter or default notice on an existing EPCG or EODC file, then our response and liaison service is relevant.
Exporters should also keep a valid RCMC Registration Certificate current, since it underpins recognition from Export Promotion Councils that is often referenced during EPCG compliance reviews.
Benefits of timely closure
An EPCG authorisation with an outstanding export obligation is a contingent liability until it is properly closed. Monitoring your export obligation is essential to protect the duty savings already made through the authorisation, and to secure cancellation of the bond and release of the bank guarantee. If the export obligation is not fulfilled, DGFT/Customs will recover duty-plus-interest on the unfulfilled portion — this page explains how to protect the value of your authorisation after it has been issued.
Same duty exemption, two very different states
The duty saved on your capital goods import is real cash today, but it is not yet a saving. Your bond and bank guarantee stay encumbered, and the authorisation remains open until the export obligation is fulfilled, substantiated with documentation, and closed through EODC, regularisation or surrender.
Once the appropriate route is completed — EODC, regularisation or surrender — the authorisation is formally closed and the bond/bank guarantee is released or cancelled. The duty exemption becomes a closed, audited outcome rather than a contingent liability sitting on your books.
Timely, well-managed closure also protects your standing with DGFT for future applications. In practical terms, a clean compliance record facilitates smoother interactions with the Directorate — whether for fresh EPCG applications, Advance Authorisation applications, amendments, or responses to audit and compliance queries — while a history of defaulted or unresolved closures invites additional scrutiny and delay. The following points help protect that record and reduce your financial exposure:
File EODC promptly on fulfilment
Timely closure through EODC releases the bond and bank guarantee furnished at the time of authorisation, removing a contingent liability from your balance sheet and freeing the bank guarantee amount for other business or financing requirements.
Don't wait for enforcement
An authorisation left unresolved after the export obligation period may be treated as a defaulted case, attracting interest in addition to customs duty. Filing the EODC application promptly after fulfilment avoids this unnecessary financial exposure.
Regularise partial shortfalls early
Where the export obligation has been only partially fulfilled, or could not be completed, opting for regularisation at the right time generally results in a materially lower financial impact than letting the authorisation drift until enforcement action begins.
Act before, not after, a DGFT notice
Taking proactive steps to close or regularise an authorisation before it becomes a defaulted case generally allows the process to be managed in a structured and timely way, rather than under enforcement proceedings once a notice has been issued.
A properly documented, successfully concluded EODC also frees up your bank guarantee for other working-capital use — a benefit that is often overlooked when long-standing guarantees remain blocked for years.
A practical example
This is an illustrative example, not an actual client case.
Case profile: a Vizag-based seafood processing exporter
A Vizag-based seafood processing exporter had not formally applied for EODC even though the 6-year export obligation under its EPCG authorisation was fulfilled, with exports supported throughout by shipping bills and e-BRCs.
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1Cross-check both blocks
Compile the export evidence
The exporter cross-checks the export obligation target for both blocks by compiling shipping bills and e-BRCs covering the full obligation period.
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2CAC obtained
Confirm export performance
A Chartered Accountant Certificate is obtained to confirm the export performance and the export obligation discharge calculation.
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3Application filed
File the EODC application
The EODC application is filed along with the previously filed installation certificate and any prior amendment letters issued by DGFT.
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4Bond/BG release
Approach Customs
Once EODC is issued by DGFT, the authorisation holder approaches the Customs authorities for release of the bond and/or bank guarantee furnished at the time of EPCG registration.
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5Review before filing
Don't assume readiness
Fulfilment of the export obligation on paper does not automatically mean the authorisation is ready for closure. A detailed review of the authorisation history, supporting documents, amendments and compliance records should be carried out first, since documentation requirements vary from case to case.
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6Verify the DGFT record
Match amendments to the system
Before submission, the exporter verifies that all amendments made to the authorisation are correctly reflected in the DGFT system. A mismatch between authorisation details, exports, imports or amendments can trigger a deficiency letter and delay closure.
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7Retain the file
Preserve the closure record
After obtaining EODC and completing closure, the exporter preserves the complete file, including the EODC and all supporting records, as evidence for any future EPCG or Advance Authorisation applications, audits or verification proceedings.
Actual timelines, documentation and eligibility depend on your specific authorisation. This illustration is generic, meant to show how the EODC closure process typically unfolds — please confirm with our team before you rely on any of it.
Documents required
Before starting an EODC closure, regularisation or surrender, ensure the availability of the below documents; the exact set may vary from case to case.
The authorisation file
- Original EPCG authorisation, along with amendment letters and extensions, if any
- Bill of Entry, to check for any under-utilisation or over-utilisation
Trade evidence
- Shipping Bills, to confirm exports made against the authorisation
- Bank Realisation Certificates (e-BRCs)
Installation & certification
- Installation Certificate, confirming installation and usage of the capital goods procured against the authorisation
- Chartered Accountant Certificate (CAC), confirming export performance against the required EO
Block-wise reconciliation
- A reconciliation note mapping each shipping bill to the specific EO block (years 1–4 or years 5–6), to avoid DGFT queries on block-wise fulfilment
File history
- Correspondence log of any prior EO extension or amendment requests and their DGFT outcomes, to present a complete file history
If your company has changed
- Corporate documents reflecting any changes in company structure or authorised signatories made after issue of the authorisation
How it works
Our EPCG closure engagement runs as a single structured process, from reviewing where your export obligation stands today through to release of your bond or bank guarantee after EODC.
Review the EO position
Check the status of export obligation by analysing the quantum already fulfilled, the balance EO to be fulfilled, and whether block-wise EO (years 1–4 and years 5–6) is satisfied.
Reconcile the export obligation
Compile the shipping bills and e-BRCs as evidence for fulfilment of the stipulated EO of the authorisation.
Obtain the CAC
Obtain the Chartered Accountant Certificate, along with any other supporting certificates required, to confirm the export performance calculation.
File the EODC application
File the EODC application with DGFT after addressing known discrepancies upfront, rather than waiting for a deficiency query.
Confirm the right exit route
Before choosing how to close the authorisation, assess the suitability of the three options — EODC closure, regularisation and surrender — for your situation.
Confirm regularisation fit, if applicable
Before proceeding with regularisation on grounds of full or partial non-fulfilment of the export obligation, ensure that the selected option genuinely suits your situation.
Approach Customs for release
Approach Customs for release of the bond/bank guarantee only after grant of EODC, and retain all EODC records for future reference.
Retain records for the audit trail
Customs may revisit a closed authorisation through an audit, so retain the complete file — EODC, CAC, shipping bills, and bank guarantee release confirmation — for at least the statutory record-retention period.
Comparison: EODC closure vs regularisation vs surrender
| Factor | EODC closure | Regularisation route | Surrender route |
|---|---|---|---|
| When it applies | Export obligation is fulfilled in full, supported by shipping bills and e-BRCs. | Unable to fulfil the obligation within the Export Obligation Period. | EPCG authorisation is not utilised to import capital goods. |
| Interest liability | Interest liability is minimal or none. | Applicable interest is required to be paid (currently 15% p.a.). | No interest liability. |
| Release of bond / bank guarantee | Released upon grant of EODC. | Remains held by Customs until closure or regularisation is completed. | Not applicable. |
| Control over the process | You initiate and control the timing and documentation of the process. | DGFT/Customs may initiate recovery proceedings, narrowing your options. | You initiate and control the timing and documentation of the process. |
Scroll left to see all three routes
FAQs
EPCG closure is the formal completion of an authorisation by obtaining an Export Obligation Discharge Certificate (EODC) from DGFT after fulfilling the prescribed export obligation, supported by shipping bills, e-BRCs and other prescribed documents. EPCG surrender, by contrast, is the voluntary relinquishment of an authorisation, generally where it has not been utilised.
An Export Obligation Discharge Certificate (EODC) is a formal certificate issued by DGFT confirming that the export obligation under your EPCG authorisation has been fulfilled in accordance with the Foreign Trade Policy. Without it, the authorisation remains open, any bond or bank guarantee furnished to Customs may not be released, and the authorisation can remain subject to future verification, audit or enforcement.
No. Surrender is applicable only when no activity has been carried out using the authorisation after its issuance. Surrendering the authorisation purely to avoid an export obligation that has already been triggered is not a meaningful option.
This is handled through the EODC clubbing route, subject to DGFT's clubbing conditions, where a single discharge application covers export performance across multiple authorisations. It is advisable to plan ahead, since the documentation required is more involved than a single-authorisation closure.
You must respond within the timeframe specified by DGFT in the query or deficiency letter, with the clarifications sought, additional documentation, or corrections. A prompt response reduces the risk of the case being treated as a default.
Yes. A Chartered Accountant Certificate (CAC) is required to confirm your export performance against the applicable export obligation.
There is no fixed turnaround time. It depends on the DGFT authority's current workload, the completeness of your export obligation fulfilment, and whether any deficiency queries are raised. We work to reduce processing time by submitting a complete, accurate application.
Each case has its own eligibility conditions and applicable fee, which should be confirmed for your specific situation rather than assumed. Extensions such as special, Covid-related or PN-53 extensions can be applied for in genuine cases where more time would allow full discharge of the export obligation.
You can free up your bank guarantee, which has been held by Customs since the date of registration, for other uses, by releasing it after grant of EODC from DGFT.
Official DGFT / CBIC source notifications
- Foreign Trade Policy (FTP) 2023, Chapter 5 — Export Promotion Capital Goods (EPCG) Scheme.
- Handbook of Procedures (HBP) 2023, Chapter on the Export Promotion Capital Goods (EPCG) Scheme.
- Customs Act, 1962 — provisions governing interest on unfulfilled export obligation.
- DGFT official portal (dgft.gov.in) — for current Public Notices on EODC, regularisation and surrender procedures.
