When you’ve availed the EPCG Scheme (and you should carefully check whether you qualify), one of the key compliance triggers is the submission of the installation certificate after importing capital goods. This requirement carries a strict deadline — the “installation certificate deadline” — and missing it may lead to penalties or even jeopardise the benefits of the scheme.

However, thanks to recent updates in the policy, that deadline has been extended and made more flexible. Properly understanding this extension can give you strategic breathing space — and a competitive advantage. In this article, we will walk you through:

• What is the installation certificate, and why does the deadline matter?
• What are the old vs. new timelines under the EPCG Scheme?
• How can you leverage the extended timeline for better operational flexibility?
• What pitfalls to avoid and key action steps should you take?

What is the Installation Certificate & Why Does the Deadline Matter?

Under the EPCG Scheme, eligible exporters/importers are allowed to import capital goods (for pre-production, production or post-production) at concessional or zero customs duty (subject to conditions). 

One of those conditions is that once the capital goods are imported, you must install them in your factory or specified premises and then obtain an Installation Certificate (IC) from either:

• The jurisdictional Customs Authority, or
• An independent Chartered Engineer (at your option) 

This certificate affirms that the imported capital goods are indeed installed at the premises mentioned in the authorisation, and are ready for use (i.e., for your export production). Failure to submit this certificate by the deadline means you may be liable for penalties, or the duty concession may be jeopardised.

Old vs. New Installation Certificate Timelines: What Has Changed

Old Timeline (Previous Policy)

Under earlier versions of the Handbook of Procedures (HBP) for the EPCG Scheme (for example, under FTP 2015-20):

For capital goods: The authorisation-holder was required to submit the Installation Certificate within 6 months from the date of completion of import. 

The Regional Authority (RA) could allow a one-time extension of up to 12 months (i.e., 6 + 12 = 18 months total) on payment of a composition fee (Rs 5,000) for the extension. 

For spares: The timeline was up to 3 years from the date of import. 

These timelines were tight for many businesses, especially if installation was delayed due to site readiness, civil works, utilities, shifting of machinery, etc.

New Extended Timeline (Recent Update)

A major relief has been announced via the Directorate General of Foreign Trade (DGFT) in Public Notice No. 15/2024-25 dated 25.07.2024.  Key changes:

For capital goods and spares under the EPCG Scheme: The timeline for submitting the Installation Certificate has been extended to up to 3 years from the date of completion of import. 

Further, submission beyond 3 years is allowed (i.e., up to the validity period of the Export Obligation (EO) of the authorisation) on payment of a composition fee of Rs 10,000 per year for each year of delay beyond 3 years. 

The existing provision for spares submission within 3 years is effectively subsumed/adjusted. 

How to Leverage the Extended Deadline Strategically

• Align Installation With Optimal Timing

With a longer deadline (3 years or more), you can plan installation in a manner aligned with your broader project schedule rather than being rushed. For instance, you may import capital goods in advance but install them when your production facility is fully ready (civil work, utilities, labour, raw material supply) without fear of breaching the 6-month-old deadline.

If you are setting up multiple units or shifting machinery, you have more cushion to coordinate logistics and avoid rush payments for extension or penalty fees.

• Optimise Cash-Flow & Budgeting

Since you don’t need to submit the IC within 6 months under the new regime (for fresh import cases), you can allocate your budget better: Delay commissioning of the machinery until you have raw material, labour, and demand lined up.

Decide to shift resources or import in batches rather than all at once, without risking non-compliance.

• Use It as Risk Mitigation

The extended timeline gives you breathing room in case of unforeseen delays, such as delays in import logistics (shipping, customs clearance), site readiness issues (foundation, utilities), machinery installation/commissioning problems, and External events (e.g., pandemic, supply chain disruption).

Rather than paying a composition fee or facing a penalty, you can legitimately use the extended deadline route.

• Strategic Shifting / Relocation

If you anticipate shifting the machinery to a new location (unit) mentioned in your IEC/RCMC, the extended deadline allows you to delay the formal submission of a fresh Installation Certificate until after the shift. The requirement is to submit a fresh IC within six months of the shift.  With the new timeline, you can plan the shift first and then handle the IC submission.

Conclusion

The extended installation certificate deadline under the EPCG Scheme represents a meaningful compliance relief for exporters/importers of capital goods. By moving from a 6-month (plus 12-month extension) regime to up to 3 years (or longer with a fee), you gain greater operational flexibility, better cash flow management and risk mitigation.

However, this relief needs to be actively leveraged — it doesn’t replace good project planning or proper record-keeping. Treat it as a strategic tool: import when you’re ready, install when your site is ready, use your machinery for export production with confidence.

By following the action steps, avoiding the pitfalls and aligning your timelines with your business cycle, you can make the most of this extended window and secure the benefits of the EPCG Scheme while staying fully compliant.