Project Import Scheme – (PIS)

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Project Import Scheme – (PIS)

Project Import means import of plant & machinery and any other things, which are required to establish a new project for manufacturing or producing or processing any approved things in India or substantially expending existing project established in India.

In the PIS all the items of project imports are assessed under the single classification under heading 98.1 of the Customs Tariff Act.1975 with single rate of duty instead of merit assessment of the imported items.

• Why Project Imports?

Normally, the imported goods are classified separately under different tariff heading accordingly assessed to the applicable Customs duty but, for setting of an Industrial Project or in substantial expansion of a Project not only plant and machineries are required but other than these varieties of other goods are required and imported. The suppliers of the contracted projects are of out of India they do not value each and every item or parts of plant and machinery to be supplied in part shipment to India for the project. In such cases determination of value of each item which is supplied in part shipment and assessment will be very unmanageable. The work for ascertaining value of different imported item delays assessment procedures and consequently clearance of the import consignment which ultimately leads to demurrage and detention charges which increase financial burden on the Importer and the time which waste in valuation of the different import items will lead to over run of project which will finally effect productivity of India.

Therefore, the Government of India has introduced PIS to facilitate smooth and quick assessment by a simplified process of classification and valuation of the goods imported under PIS through a single Tariff in the Customs Tariff Act, 1975. This facilitates faster assessment and clearances of goods at concessional rate of the Customs duty.

• Eligibility - How to avail benefit of PIS

The Central Board of Excise and Customs has, pursuant to the power conferred under Section 157 of the Customs Act, 1962, made the Project Import Regulations,1986 which regulates the Project Import Scheme. As per the said regulations the primary requirement for being eligible for concessional rate of duty under Project Import Scheme is the project should be sponsored by the specified sponsoring authorities (list of the Sponsoring Authorities is as under) with a detailed itemized list of goods to be imported duly attested by the sponsoring authority and imported under specific contracts registered with the Customs Authorities at the Port of discharge prior to the import of the goods.

The list of projects and sponsoring authorities specified under Project Import Regulations, 1986 are as under:-

The concept of Sponsoring Authority has been mentioned under Project Import Regulation, 1986 and depending upon the nature of the project, different Ministry/ Department have been specified as sponsoring authority by that Chapter Tariff Heading 98.01 of the First Schedule to the Customs Tariff Act, applies only to specified projects sponsored.

: Sponsoring Authority:

Sr. No.	Name of the Plant or Project	Sponsoring Authority
1.	All plants and projects under SSI Units	Director of Industries of the Concerned State
2.	All Power Plants and Transmission projects under :-
	(a)National Thermal Power Corporation Ltd.	National Thermal Power Corporation Ltd., NTPC Bhawan, SCOPE Complex, 7, Lodi Road, Institutional Area, New Delhi -110 003
	(b)Tehri Hydro Development Corporation Ltd.	Tehri Hydro Development Corporation Limited Bhagirathi Bhawan (Top Terrace), Bhagirathipuram, Tehri Tehri (Garhwal) 249 001(UP).
	(c) Nathpa Jhakri Power Corporation Ltd.	Nathpa Jhakri Power Corporation Limited Himfed Building Khalini, Shimla (HP).
	(d) North Eastern Electric Power Corporation Ltd.	North Eastern Electric Power Corporation Limited Brookland Compound Lower New Colony Shillong – 793 001.
	(e) National Hydroelectric Power Corporation Ltd.	National Hydroelectric Power Corporation Limited NHPC Office Complex Sector-33, Faridabad Faridabad (Haryana).
	(f) Bhakra Beas Management Board.	Bhakra Beas Management Board Madhya Marg, Sector-19/B Chandigarh - 160 019.
	(g) Central Power Research Institute.	Central Power Research Institute, Prof. C.V. Raman Road, Raj Mahal VilasExtn. II, Stage P.O., P.B. No. 9401, Bangalore - 560 094.
	(h) National Power Training Institute.	National Power Training Institute Sector 33, Faridabad Haryana - 121 003.
3.	Power Plants & Transmission Projects other than those mentioned at Sl. No. 2 above.	Secretary to the State Government or Union Territory concerned dealing with the subject of power or electricity.
3A.	Drinking Water Supply Projects for supply of water for human or animal consumption	Collector/District Magistrate/Deputy Commissioner of the District in which the project is located.
3B.	Aerial Passenger Ropeway Project	Joint Secretary to the Government of India in the Ministry of Tourism or the Secretary to a State Government dealing with subject of tourism
3C.	Water Supply Projects	Collector/District Magistrate/ Deputy Commissioner of the District in which the project is located.
3D.	Pipeline projects for the transportation of crude oil, petroleum products or natural gas	Ministry of Petroleum and Natural Gas.
3E.	(a) Digital cinema development projects (b) Digital head end project	Ministry of Information and Broadcasting.
3F	Metro Rail or Monorail projects for urban public transport	Concerned State Government
3G	Project for installation of mechanized handling systems and pallet racking systems in mandis and warehouses for food grains, sugar and horticulture produce	Ministry of Agriculture
3H	Cold storage, cold room (including farm level pre-cooling) or industrial projects for preservation, storage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat	Ministry of Food Processing Industries
3 I.	Green house set up for protected cultivation of horticulture and floriculture produce	Ministry of Agriculture
4.	Any other Plant and Project.	Concerned Administrative Ministry or Department.

• Registration of Contracts

Any importer who wish to avail benefit of PIS by claiming assessment of imported goods falling under the Customs Tariff Heading 98.01 and claim benefit of the concessional rate of duty shall be required to register all their import contracts with the Customs authorities where the imported goods are to be imported or where the duty is to be paid for for registration of contract or contracts as the case may be:

The application is to be made in writing to the above Customs authorities. In case where any item is sought to be cleared at any other Customs House other than the Customs House where the contract is registered the importer shall produce from the Customs House of registration such information as may be required by the proper officer at the port of importation.

The importer shall make application as soon as the Import licence is received from the DGFT in case of import   licence is required to import or if the import items are under Open General Licence (OGL) immediately upon the receipt of the clearance from the concerned sponsoring authorities.

1. the application shall specify the following details:
2. the location of plant
3. the description of the articles to be manufactured, produced, mined or explored.
4. the installed or designed capacity of the plant and in the case of substantial expansion of an excising plant or project the installed capacity and proposed addition thereto.
5. The applicant shall be required to give other information as may be considered necessary by the proper officer of Customs for the purpose of assessment.

The applicant is require to send original deed of Contract for import items along with true copy thereof, import licence if required and an approved list of import item from the concerned sponsoring Authorities. After satisfying that goods are eligible for PIS benefit and importer has submitted all the required documents, the contract is registered by the Custom House in the register kept for registration of Project Contracts and Project Contract Registration Number (PCRN) is assigned and communicated to the importer. The importer is required to mention/refer  the said PCRN in all subsequent communications relating to the subject Project Import.  

• Security

As prescribed by the Government the importer needs to give a security in the form of Bank guarantee equivalent to 2% of the CIF value of the goods to be imported under the Project Import Scheme subject to a maximum of ₹ 1 Crore. At the time of the registration of the contract.

The Government department and Public Sector Units are exempted from furnishing security. In case of any other projects, which are liable to zero rate of duty such projects needs to give a nominal security not exceeding 0.5% of the CIF in stead of 2% of CIF value at the time of registration of the Contracts.

• Provisional Assessment of Bills Of Entry

All the imports made under the PIS shall be provisionally assessed till the reconciliation and finalization of the Contracts registered under the PIS. The Importer is required to submit a provisional duty bond to the Assistant/ Deputy Commissioner of Customs, Project Import Group. The said authorities accept the bond and as a token of acceptance of the Bond and registration of the Contract allot and communicate the above referred PCRN.The provisional duty bond is accepted by the Assistant/ Deputy Commissioner of Customs, Project Import Group. The details of the contracts are entered in the register kept for the purpose and then Project Contract Registration Number is assigned and communicated to the importer.

• Amendment of Contract

 If an importer who has registered contracts to have benefits of PIS and wishes to amend the contracts before or after registration of the Contract with the Customs Authorities he may so amend the contracts. In such case the importer shall make an application to the proper office of Customs for registration of the amendment made to the contract already registered with the Customs.

The importer shall send the original deed of contract relating to the amendment along with a true copy thereof and any other documents like the Import licence if consequential amendment is required and incase of the import is under OGL immediately on the receipt of the clearance from the concerned sponsoring authority.

• Finalisation of Contract

The Importer shall within 3 months from the date on which the last consignment of the goods of the registered contract is cleared for home consumption or within the period as may be extended by the proper officer of the Customs, submit a statement indicating the details of the imported goods along with all the necessary documents as proof regarding the value and quantity of the goods so imported in the terms of PIS and other documents that may be required by the proper officer for finalization of the Contract registered. The proper office of the Customs if satisfied the contracts will be finalized and closed and the security in the form of Bank Guarantee will be discharged and returned to the importer.

• Final Assessment of  Bills Of Entry

 Upon the finalization of the Contracts all the Bills of entry of the goods imported under the PIS shall be finally assessed by the Customs and the provisional assessment Bond will be cancelled.