₹128.58 crore revenue loss due to lax Project Imports Scheme controls, CAG finds

Who it concerns: Union Government, Department of Revenue (Indirect Taxes - Customs), specifically the Central Board of Indirect Taxes and Customs (CBIC) and its field formations.

What the auditor found

• Revenue implication of ₹128.58 crore identified by CAG.
• Procedural irregularities involving ₹2,979.33 crore noted in the audit.
• Duty foregone on account of concessional assessment stood at ₹6,704.55 crore during the audit period.
• In 57 finalised cases, contracts were closed without mandatory Installation Certificates or Plant Site Verification.
• Cargo clearance delays ranged from 3 to 1,149 days, contrary to the scheme's objective of rapid movement.
• 139 cases involving a CIF value of ₹15,818.11 crore were not made available to the Audit.
• CAG recommended 11 actions, including prescribing specific timelines for registration and import completion, and implementing automated system checks in the ICES platform.

Also in the document

• CAG observed that the Project Import Regulations, 1986, do not prescribe specific timelines for registration or completion of imports, which may lead to duty evasion and loss of revenue.
• The audit found that benefits were extended to projects and machinery that were not notified or ineligible, indicating deficiencies in verification at the assessment stage.
• Systemic issues were identified in the finalisation of provisional assessments, including instances where Bank Guarantees and Bonds were not renewed while contract finalisation remained pending.