Assessment under Project Import Regulations, 1986 - Requirement of cash security in lieu of bank guarantee - CBEC Instructions
THE issue regarding furnishing of a cash security equal to 2% of the CIF value of the goods sought to be imported under Project Import has further been examined by the Board.
In view of the reduction in import duty and the inordinate delay associated with finalisation of the said project imports, it has been decided to do away with the practice of taking cash security.
Henceforth, subject to a maximum of Rs. 1 Crore, only a bank guarantee, equivalent to 2% of the CIF value of goods sought to be imported, would be taken at the time of registration of the Project Contract under Project Import Regulations, 1986. The said bank guarantee shall be backed by an undertaking that it would be renewed from time to time. However, the said bank guarantee need not be renewed on completion of a period of six months from the date of submission of necessary documents, from the jurisdictional Central Excise authority or any other specified authority, as proof of utilisation / installation of goods for the finalisation of the contract.
CBEC Circular NO.12 /2011-CUSTOMS Dated: March 01, 2011