Explain the purpose of introducing duty exemption & remission schemes and export promotion of capital goods (EPCG).

Duty exemption schemes enable duty-free import of inputs required for export production. Duty Exemption Schemes consist of: Advance Authorisation scheme: An Advance Authorisation is issued to allow duty-free import of inputs, which are physically incorporated in the export product (making normal allowance for wastage). Duty Free Import Authorisation (DFIA) scheme: A Duty Free Import Authorisation is issued to allow duty-free import of inputs which are used in the manufacture of the export product (making normal allowance for wastage), and fuel, energy, catalyst etc. which are consumed or utilised in the course of their use to obtain the export product. Duty Remission schemes enable post-export replenishment/remission of duty on inputs used in the export product. Duty Remission Schemes consist of the Duty Drawback (DBK) Scheme. Export Promotion Capital Goods Scheme (EPCG): The EPCG scheme allows the import of capital goods for pre-production, production and post-production at 3% Customs Duty, subject to an export obligation equivalent to 8 times of duty saved on capital goods imported under the EPCG scheme, to be fulfilled in 8 years reckoned from the Authorisation issue-date. In the case of agro units, and units in the cottage or tiny sector, the import of capital goods at 3% Customs duty shall be allowed subject to the fulfilment of an export obligation equivalent to 6 times of duty saved on capital goods imported, in 12 years from the Authorisation issue-date.