Project imports - CBEC's Customs Manual 2023 - Customs

2. Project imports: 2.1 Project Imports is an Indian innovation to facilitate setting up of and expansion of industrial projects. Normally, imported goods are classified separately under different tariff headings and assessed to applicable Customs duty, but as a variety of goods are imported for setting up an industrial project their separate classification and valuation for assessment to duty becomes cumbersome. Further, the suppliers of a contracted project, do not value each and every item or parts of machinery which are supplied in stages. Hence, ascertaining values for different items delay assessment leading to demurrage and time and cost overruns for the project. Therefore, to facilitate smooth and quick assessment by a simplified process of classification and valuation, the goods imported under Project Import Scheme are placed under a single Tariff Heading 9801 in the Customs Tariff Act, 1975 . The Central Government has formulated the Project Import Regulations, 1986 prescribing the procedure for effecting imports under this scheme. 2.2 The Project Import Scheme seeks to achieve the objective of simplifying the assessment in respect of import of capital goods and related items required for setting up of a project by classifying all goods under heading 9801 of the Customs Tariff Act, 1975 and prescribing a uniform Customs duty rate for them even though other headings may cover these goods more specifically. 2.3 The different projects to which heading 9801 applies are; irrigation project, power project, mining project, oil/mineral exploration projects, etc. Such an assessment is also available for an industrial plants used in the process of manufacture of a commodity. The Central Government can also notify projects in public interest keeping in view the economic development of the country to which this facility will apply. Thus, a number of notifications have been issued notifying a large number of projects for assessment under Tariff Heading 9801 . However, this benefit is not available to hotels, hospitals, photographic studios, photographic film processing laboratories, photocopying studios, laundries, garages and workshops. This benefit is also not available to a single or composite machine. 2.4 Goods that can be imported under Project Import Scheme are machinery, prime movers, instruments, apparatus, appliances, control gear, transmission equipment, auxiliary equipment, equipment required for research and development purposes, equipment for testing and quality control, components, raw materials for the manufacture of these items, etc. In addition, spare parts, consumables up to 10% of the assessable value of goods can also be imported under Project Import. 2.5 The purposes for which such goods can be imported under the Project Import Scheme are for initial setting up or for substantial expansion of a unit of the project. The unit is any self-contained portion of the project having an independent function in the project. A project would fall under the category of substantial expansion if the installed capacity of the unit is increased by not less than 25%, as per the Project Import Regulations, 1986 . 2.6 The scope of the items eligible for import under the Project Import Regulations 1986 , shall cover construction equipment as auxiliary equipment; if essentially required for initial setting up or substantial expansion of registered projects. The construction equipment may be permitted to be transferred to other registered project under CTH 9801 , after completion of its intended use, on recommendations of sponsoring authority. The Plant Site Verification Certificate required to be submitted for finalization of project as per Circular No. 14/2006-Cus., dated 17-4-2006 shall incorporate the details of construction equipment imported and used for the project, to ensure proper utilization of goods imported. [Refer Circular No. 49/2011-Cus. dated 4-11-2011 ]