BIS or QCO Not Applicable when goods imported in India are for Captive Consumption

BIS or QCO Not Applicable when goods imported are for Captive Consumption

1. We understand that the BIS standards are enforceable through the Quality Control Orders as per Section-16 of the BIS Act, 2016.

2. Attention be drawn to the proviso under Section-17(1) of the BIS Act, 2016 which prohibits the manufacture, import, distribute, sell, hire, lease, store or exhibit for sale any such goods, article, process, system or service under sub-section (1) of section 16 of the BIS Act, 2016.

3. Therefore, the above said proviso of Section 17(1) of the BIS Act, 2016 is applicable only in case of “SALE” and not “Captive Consumption”.

4. Clear inference can be drawn from the fact that if the products imported by Indian manufacturer in India is only for the purpose of utilising the same for Captive Consumption and not for Sale then the provision of Section-17 of the BIS Act, 2016 does not apply. Henceforth, the Provisions of Section 16 (1) can not be invoked in such cases of import of goods for “captive consumption”.

5. Similar provision of exemption is also available under Chapter-II Section 3 of the LMPC Rules, 2011, where the LMPC Rule does not apply on goods which are imported for Captive Consumption by Industrial units or Institutional organizations.

6. The Quality Control Orders are issued to enforce BIS Standards in India, which otherwise is voluntary in nature.

7. It can be concluded from the above that, when BIS is not applicable on the goods imported for Captive consumption, because it does not amount to “Sale”, then the Quality Control Orders (QCO) becomes inapplicable in such a case.

8. Procedural requirements have been placed by the Line Ministries/Departments which are issuing the Quality Control Orders (QCO), which is contrary to the Law for the time being in force.

Authored by: Ravi Shekhar Jha, BALLB

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