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Intricacies of Project Authority Certificate for Deemed Exports


(As applicable for EPC Contractors and Subcontractors in Power Projects)

The Director General of Foreign Trade (DGFT) is the competent authority to issue such a certificate which is aimed at making the domestic bidder competitive. A PAC allows a domestic importer to procure goods through imports at concessional rates. General applications and requirements are:


A. for Import of Capital Goods and Spares directly by Project Authority.

Application along with list of items of import with their brief technical specification, quantity and CIF value of individual items (individual items breakup is necessary and lump sum price is not allowed).Copy of Industrial Approval accompanied by copy of Performa Invoices for items of import along with a brief Technical justification is required in the application


 B. for Import of Raw Material, Components and Spares by indigenous vendors on whom Orders placed by Project Authority for supply of Capital Goods.

Application along with lists of items of import with their brief technical specification, quantity and CIF value of individual items and a copy of confirmed order placed by Project Authority on Vendor. Copy of Industrial Approval for the Project along with copy of Industrial Approval obtained by the vendor for the manufacture of Capital goods under reference is also a pre-requisite. Other than this; Essentiality Certificate from Project Authority containing brief details of project and order placed on vendor and a declaration to the effect that concessional duty benefits have been passed on to them by the vendor and Declaration from vendor to the effect that concessional duty benefits accrued will be passed on to Project Authority is also required. Standard requirement of a copy of Performa invoice for the items proposed for import and brief technical justification for the items applied for import is a must. In respect of supply of capital goods the supplier shall produce a certificate from the respective Assistant Commissioner of Customs and Central Excise having jurisdiction over the factory as evidence of having supplied/received the manufactured capital goods and shall produce documentary evidence substantiating the realization of proceeds from the EPCG license holder through the normal banking channel. The supply of capital goods alone to the power projects shall be entitled for deemed export benefits provided the same is certified by the Central Electricity Authority and the International Competitive Bidding procedures have been followed for supply of such capital goods to the power projects. The domestic supplier shall be eligible for the benefits. 


Supplies made by an Indian sub-contractor of an Indian or foreign main contractor, shall also be eligible for deemed export benefits provided the name of the sub- contractor is indicated in the contract, and payment certificate is issued by the Project Authority in the name of the sub-contractor in the appropriate form. In respect of supplies made by sub-contractor to the main contract, the main contractor may make payment to the sub-contractor and issue payment certificate. In such cases, main contractor shall be eligible for deemed exports benefits only to the extent of goods manufactured and supplied by him as indicated in the main contract and the project authority certificate. Similarly, the deemed exports benefits to the sub-contractor would be available to the extent of goods that are manufactured and supplied by him for the value as indicated in hand book of DGFT.


While entertaining the claim of sub-contractor, the sub-contractor would be required to submit a copy of payment certificate issued by project authority to the main contractor for entire supplies as well as payment certified from the main contractor indicating receipt of payment from main contractor to the extent supplies affected by sub-contractor through banking channel, in addition to other prescribed documents in accordance with the provisions of the Policy, deemed exporters shall be entitled to claim Special Import Licence at the rate of 6% of FOR value (excluding all taxes and levies) in accordance with the procedure laid. No Excise duty and sales tax is applicable on such goods which are imported under PAC.


Comment from S.L.SARAF
Time June 23, 2011 at 1:05 pm

We have supplied power plants pip[elines coating materials against P A C issued BY NTPC
at nil rateof duty but excise dept is not accepting.Please advise.

Comment from Jyoti Nauhria
Time August 26, 2011 at 11:37 am

Is there a limit to the number of project authority certificates that can be issued against aone project

Comment from Bipin Modi
Time September 7, 2011 at 8:38 am

Dear Sir,
We are sub contractors and Main contractor who is big corporate undertaken CBM Project under petroleum exploration licenses ( ICB Bidding).We have to consider nil import duty under noti.21/2002, sr no.218.i.e deemed export category. Main contractor had issued us Project Authority certificate on their letter-head duly signed by their Chief Executive Officer.We had many argument with them about PAC issued on letterhead with their CEO signature but they confirmed it was issued as per CBM Policy( comes under Director General Hydrocarbon ) and it is as per policy.
Will this PAC eligible us for nil import duty as per DGFT policy.
Please guide sir

Comment from devanshu joshi
Time March 13, 2012 at 9:49 am

Supply of Materials against PAC can we supply against Advance license Authorization scheme

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