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What is an Export Obligation Discharge Certificate (EODC)?

On fulfilling an export obligation, an Export Obligation Discharge Certificate (EODC) is issued to the authorization holder. Learn about its need and process to apply in this blog.

Exports are an important aspect of international trade and commerce, impacting the country’s overall economy. In order to make exports seamless, governments across the world have introduced various schemes, incentives and certificates. In India, there are many such benefits and compliance-related terms that exporters are required to understand before global expansion of their businesses. One such term is ‘export obligation’ – which implies an obligation stipulated by a regional or competent authority related to exporting goods or any authorized/permitted product in terms of quantity, value or both. On fulfilling an export obligation, the regional authority issues an Export Obligation Discharge Certificate (EODC) to the authorization holder (exporter) as proof of completion.

What is an Export Obligation Discharge Certificate?

On completion of an export obligation, the authorization holder (exporter) receives an Export Obligation Discharge Certificate (EODC) on providing an application in ANF 5B to the respective regional authority under the Directorate General of Foreign Trade (DGFT). After completing an export obligation, the exporter must provide documentary proof of the export transaction like shipping bill and bill of export to DGFT for closure of the advance license. The regional authority will issue an Export Obligation Discharge Certificate to the said authorized holder after completing all advance license formalities¹.

What is the need for an Export Obligation Discharge Certificate?

To help Indian importers and exporters, the Government of India launched the Advance Authorisation Scheme (AAS), as part of its Foreign Trade Policy. AAS allows duty-free imports of raw materials and other inputs needed to manufacture export goods. A manufacturer exporter or merchant exporter collaborating with a supporting manufacturer can avail of the benefits of the AAS. However, until the advance license or advance authorisation is closed, the exporter cannot sell goods manufactured from imported raw materials or dispose of such raw materials. In such cases, the DGFT issues an EODC when all documents are in order. An EODC certificate is a necessary document for an exporter as it is proof of discharge of their export liability. To further provide seamless business operations and ensure trade transparency, the DGFT has enabled online filing for closure of advance licenses as per trade notification 49/2020-21 dated March 30, 2021².

What to consider before applying for an EODC?

Before applying for an Export Obligation Discharge Certificate, key criteria to be met by exporters include:
• Fulfilment of export obligation by an application in ANF 5B (from the regional authority office under DGFT)
• Cover letter issued by an authorized signatory
• Two copies of the duly filled and duly signed ANF 4F form
• If Central Value Added Tax (CENVAT) credit has been availed on inputs for exported goods, then a certification from the Chartered Accountant or Central Excise Superintendent, stating that the imported material was or will be considered only for manufacturing dutiable goods post the completion of export obligation.
• For non-excisable items or units of export, documentary evidence is required or a Chartered Accountant (CA) or Central Excise Superintendent certification with the declaration that CENVAT credit has not been availed
• Import statement
• Appendix 23A is proof of input consumption against advance authorization

How to apply for an EODC online?

Below are the steps to apply for an Export Obligation Discharge Certificate online:
1. Visit the DGFT website.
2. Click on ‘Advance Authorisation/DFIA’ under services tab.
3. Click on ‘Redemption/Closure of Advance Authorisation’.
4. Login to the website by entering the required details.
5. Click on either of the two options displayed as suitable: ‘Start the Application’ or ‘Proceed with an Existing Application’.
6. Fill in the mandatory requirements. Non-exchange data interchange (non-EDI) documents, including shipping bills, bills of entry, CA certificates and bank guarantees, are not automatically updated. The authorization holder must upload non-EDI documents to the relevant database before applying for an EODC.
7. Click the ‘Export’ tab to check export details and add them to the database.
8. Click the ‘Input’ tab to check input details.
9. Click the ‘Redemption Matrix’ tab for license redemption/surrender, regularizing duty paid and waiver of bond.
10. Click the ‘Attachment’ tab to attach non-EDI and related documents stated in step 6.
11. Click the ‘Declaration’ tab after checking all boxes and accepting the terms and conditions. Fill out the company particulars and sign the online EODC application via digital signature or Aadhaar card.
12. Click the ‘Summary’ tab and save it in PDF format.
13. Submit the online EODC application.

How to make amendments to an online EODC application?

Follow the below steps to make basic amendments to an online EODC application:
• Generate a request for amendment.
• Values/entries should be changed only when a mandatory field is empty or the application is not being accepted.
• In the ‘dialogue box’, state the remark, ‘This is a validation request’.
• Submit the amendment request application.

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Frequently Asked Questions

What happens if an export obligation is not fulfilled?

If the prescribed customs-specified export obligation is not fulfilled, then the exporter is required to pay customs duties and interest charge in proportion to the unfulfilled value.

Who can issue an EODC?

The Directorate General of Foreign Trade (DGFT) issues an Export Obligation Discharge Certificate (EODC) to the authorization holder (exporter) after checking the overall closure application.

How do you calculate the average export obligation in EPCG scheme?

The export obligation in Export Promotion Capital Goods (EPCG) scheme falls under the annual average export obligation and specific export obligation sections. To calculate average export obligation, an exporter’s level of exports generated in the preceding three licensing years for the same/similar goods within the overall export obligation period plus an extended period should be considered. This average implies the arithmetic mean of export performance for the same/similar items in the preceding three years.

Published on November 29, 2022.

Sources:
1. https://afleo.com/learn/eodc-online-redemption-of-advance-license/#:~:text=After%20checking%20the%20completeness%20of,the%20forms%20and%20required%20documents.
2. https://www.exportgenius.in/notification/introduction-online-export-obligation-di-145.php
3. https://content.dgft.gov.in/Website/dgftprod/46d49520-8668-433f-8a80-40db717bdb8f/Trade%20Notice%2049.pdf
4. http://dgftcom.nic.in/dgftmumbai/html/trmum/FY13/Check%20Lists/Check%20List%20for%20Redemption-EODC%20-%20Advance%20Authorisation.pdf
5. https://www.dgft.gov.in/CP/

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