Project Import

7/31/2019 Project Import

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Ascertaining values for different itemsfurther delayed assessment on merits

and leading to demurrage and time andcost overruns the project.

Hence the project import provisionsintroduced in custom tariff in 1965 andstill continuing facilitating quickassessment by simplifying the process ofclassification and valuation of goods.


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Objective of simplifying the assessment of suchgoods and to levy of a flat rate of a duty in respectof such goods has been achieved by

incorporating a heading 98.01 under chapter 98 ofCustom Tariff.

All the goods approved for importation inconnection with industrial project are classified

under this heading. Different projects to which same heading applies

are irrigation projects, power projects, miningprojects etc.


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Machinery, Prime movers, instruments, apparatus,appliances ,control gear, transmission equipmentsreqiured for resarch and development purposes

raw material for manufacturing above items etc. Purpose for such goods can be imported are for

initial setting up or for substantial expansion of anunit of the project.

A project falls under the category of substantialexpansion if the installed capacity of the unit isincreased by not less than 25% as per ProjectImport Regulations.


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Registration of the contracts: If a person wants thebenefits under this scheme, he has to enter intoone or more contracts with the suppliers of the

goods. Such contracts should be registered prior toclearance in the Custom House.

As per regulation 4 the assessment under Heading98.01 is available only to those goods which are

imported against one or more contracts.


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An application for registration of the contract

Original deed of contract together with true copy.

Industrial license and letter of intent,SSI Certificategranted by the appropriate authority and a copythereof.

Original Import license if any with a list of itemsshowing the dimensions, specifications, quantity,

quality, valued of each item duly attested by thelicensing authority and a copy thereof.

Cash security along with Bank Guarantee/Bondneeds to be submitted, which gets redeemed after

completion of imports.


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Process flow chart, Plant Layout, Drawings

showing the arrangement of imported

machines along with an attested copy of

the project Report submitted to the

sponsoring authorities, Financial Institutions.

Two attested copies of foreigncollaboration agreement, equipment

supply agreement or any other agreement

including the details of payment.


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Contract is registered by Custom Houseafter submission of required documents.

As a token of registration provisionalduty bond is accepted by Ac/Dc ofCustoms.

Details of the Contracts are entered.

Project Registration(Contract) number isgiven.


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Project Registration number is required inevery Bill of Entry

Then B/E is sent to Project Group toexamine

Then B/E is assessed provisionally and

handed over to importer for payment ofduty.

Project group keeps a record with them


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a) Submission of Reconciliation statement

Importer is required to submit the

reconciliation statement within threemonths from the date of clearance ofthe last consignment.

Copies of the bills of entry, invoices,andfinal payment certificate

b) Plant site verification

c) Action by the Assessing Group


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Effective duties under Project Imports are lowerthan the normal and depends on the kind ofProject.

For Industrial Projects/ Non Mega Power Projectsetc., all items covered under the Project Importsnow attracts only 5% Basic Customs Duty. Inaddition CVD + ACVD + CESS is leviable which

makes the total duty to approx. 22.853% as againsta normal total of 25.852% is payable on the CapitalGoods alone.

The scheme thus offers a saving of approx. 3%.


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Textbook-Introduction to foreign TradePolicy

www.Eximguru.com

Textbook-Custom Tariff Policy


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Documents

Project Import