imports under EPC contracts

[RAMASWAMY KRISHNAIYER]

We are a manufacturing company udertaking an expansion project.   we execute projects under EPC scheme (ie.engineering, procurement , construction) under the scope of contractor.

The contractor will have to import goods from outside india.   we want to avail concessional customs duty of 5 percent under PIR.   We propose to tell the EPC contractor to ask foreign supplier to ship the goods to us (manufacturer), show in the invoice buyer as EPC contractor , consignee as us (manufactuer).

we intend to file B/E and clear the goods so that we can take cenvat benefit of CVD.

But EPC contractor , who has to make foreign remittance to supplier, has following issues:

1)now B/E filing is on computer system (ED1), no provision to write name of EPC contractor like manufacturer a/c EPC contractor

2)In the absence of above contractor cannot produce proof of import to RBI/dealers.

3)what value should be declared for duty payment, the value foreign supplier billed on Contractor OR actual payment manufacturer gives to the contractor.

4) any agreement required between manufacturer/contractor/foreign supplier on this.

kindly offer your suggestions so that customs clearance is smooth and contractor does not have problem for foreign payments

regards

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above said issue? If not please inform.

AI Summary

Import documentation under EPC contracts: consignee designation, valuation and proof issues affect customs duty concessions and compliance. Operational questions in EPC contract imports include whether a manufacturer designated as consignee but invoiced to the EPC contractor can clear goods to claim concessional customs duty and obtain Cenvat; the impact of electronic Bill of Entry limitations on recording an EPC contractor account and providing proof of import for remittance; whether duty valuation follows the supplier's invoice to the contractor or the manufacturer's actual payment to the contractor; and whether specific agreements among manufacturer, contractor and foreign supplier are needed to regularise documentation and compliance.