Contours of BIS Framework for Supply Chain Management

  • Blog|GST & Customs|
  • 5 Min Read
  • By Taxmann
  • |
  • Last Updated on 29 March, 2023

BIS Framework; Supply Chain Management

Table of Contents

1. Introduction to BIS

2. Foreign Manufacturers Certification Scheme

3. Compulsory Registration Scheme

4. Implementing BIS – Business Challenges

5. Recent Developments

6. Conclusion and Key Takeaways

1. Introduction to BIS

1.1 Overview – BIS

  • The Bureau of Indian Standards (‘BIS’) is India’s statutory national standards body prescribing the qualitative standards for covering goods and services under the standardization regime
  • BIS helps in providing safe, reliable and quality goods, minimizing health hazards to consumers, protecting the environment promoting exports and substitute imports controlling the proliferation of varieties etc.
  • Primary objective of BIS is to formulate and prescribe the standards for products for their certification
  • BIS carries out various activities like that of standards formulation, product certification, hallmarking, laboratory services, training services etc.

1.2 Significance of BIS

  • Functions as non-tariff barrier
  • Promotes ‘Make In India’
  • Non-adherence – Supply Chain Distribution

Leaders have time and again stressed on the importance of importing high-quality products to build a manufacturing ecosystem driven by qualitative parameters.

Hon’ble PM has emphasized on “Zero Defect- Zero Effect”

Hon’ble Commerce Minister, Mr Piyush Goyal, focused on the completion of 100 years of BIS and spoke on mantras for BIS to grow in future – Jan, 2020

Hon’ble FM during the Budget- 2022 focused on the implementation of quality standards, mandatory technical standards and their enforcement | Research | GST

2. Foreign Manufacturers Certification Scheme

  • Provides certification to foreign manufacturers having a factory location outside India in relation to the products imported into India
  • Applicable for grant of licence for all the products except Electronic & IT Goods notified by the Ministry of Electronics & Information Technology
  • Applicant manufacturer needs to have complete manufacturing facilities, complete testing equipment as per the Indian Standards and the presence of a qualified Quality Control Person
  • Use or application of Standard Mark is granted for products manufactured in manufacturing premises and conforming to all the requirements of the relevant Indian standard

2.1 Key Features of FMCS Process

  1. Pre-filing application to be made to the authority along with information such as factory layouts, list of Machinery/test equipment and details and qualifications of lab in-charge
  2. Appointment of Authorized Indian Representative (AIR) is required for the foreign manufacturers ONLY
  3. Test Report/Equipment List are required to be submitted in the specified formats
  4. In-house testing labs to be set-up in the manufacturing premises
  5. Clearance of application by the BIS authorities and appointment of scientist for factory visit
  6. Visit of BIS appointed scientist to manufacturing premises of the Applicant
  7. Sampling of one product under each category and submission of same for testing at BIS approved Labs in India
  8. On issuance of clear test reports by the Labs, the Applicant to submit the test reports along with requisite documents within 90 days from the issuance
  9. Undertaking shall be signed along with Performance Bank Guarantee of USD 10,000 (NA for domestic manufacturer) and Indemnity Bond
  10. Grant of License – License shall be granted for the period of not less than one year and up to two years

2.2 Products covered under FMCS

  1. Steel and Iron Products: Eg: Indented wire for pre-stressed concrete
  2. Automobile Accessories: Eg: Automotive Vehicles
  3. Chemicals Product: Eg: Aniline
  4. Electrical motors: Eg: Induction motors
  5. Food & Related Products: Eg: Milk Powder
  6. Batteries: Eg: Multi-purpose dry batteries
  7. Medical Equipment: Eg: Clinical thermometers
  8. Cement: Eg: Low heat Portland Cement
  9. Electrical Transformers: Eg: Transform
  10. Household Electrical goods: Eg: AC watt-hour meters
  11. Capacitors: Eg: A.C. motor capacitors
  12. Cylinder, Valves & Regulator: Eg: LPG containers for automotive use

2.3 FMCS Process

STEP 1: Filing of applications

STEP 2: Preliminary approval and appointment of BIS scientist

STEP 3: Site visit and issue of Test Reports

STEP 4: Grant of License

3. Compulsory Registration Scheme (CRS)

  1. Compulsory registration for manufacture, storage, import, sale or distribution in India for specified products
  2. Products to be properly tested and registered under BIS to ensure public health and safety
  3. For products notified by the Ministry of Electronics and Information Technology (Government of India) in relation to Electronics & IT Goods
  4. For products notified by the Ministry of New and Renewal Energy-products like: Solar Photovoltaic, Systems, Devices and Components etc.

3.1 Key Features of CRS

  1. Online application based on self-declaration
  2. Grant of License for 2 years
  3. Sample testing or feedback from organised buyer
  4. Review of application and test report to be filed within 90 days
  5. Third party laboratory tests
  6. Renewal after 2 years

3.2 Products covered under CRS

3.2.1 Electronics

Electronics and IT Goods notified by Ministry of Electronics and Information Technology

E.g.: Audio, video & electrical apparatus

3.2.2 Solar

List of Solar Photovoltaics, Systems, Devices and Components under Compulsory Registration Scheme

E.g.: Storage Battery

3.2.3 Circuits

Low Voltage switchgear and control gear notified by the Ministry of Heavy Industries & Public Enterprises

E.g.: Circuit Breakers

3.3 Process under CRS

  1. Online filing of the application
  2. Product testing at certified BIS lab
  3. Issue of Test Report
  4. Apply on BIS portal using the verified Test Report within 90 days
  5. Submission of documents as per checklist | Practice | GST

4. Implementing BIS – Business Challenges

  • Extensions granted through Quality Control Orders are on the verge of being exhausted
  • Customs authorities are mapping the imports with BIS
  • Disruption of supply chain due to non clearance of imports
  • Awareness among Importers
  • Awareness among authorities

4.1 Quality Control Orders

  • Steel and Steel Products (Quality Control) Order, 2020
  • Ductile Iron Pressure Pipes and fittings (Quality Control) Order, 2009
  • Mild Steel Tubes (excluding seamless tube & tubes according to API Specification)
  • Malleable Iron Shots and Grits

Quality Control Orders have been given several extensions due to pandemic – however, recent statements by Mr Piyush Goyal indicates that no further extension shall be granted

BIS certification process is applicable on the final output product (being imported into India), however certain QCO makes BIS applicable even on raw material used for making final product

5. Recent Developments under BIS

  • Central Government in consultation with the BIS has notified Hydrogen Peroxide on August 24, 2022, to extend the date  of enforcement of the BIS regulations covering Stabilized Hydrogen Peroxide (IS 2080:2021)
  • MCA  has  published dated Dec 12,  2022, the BIS standard to bring ‘online consumer reviews within the BIS framework to increase the influence of online reviews on consumer’s purchasing decisions
  • DIIPT has announced the process on Dec 26, 2022, contemplating to bring about 50 Quality Control Orders including aluminium products, lighters, sports goods etc. under quality control norms of BIS by the second quarter of 2023-24
  • Vide Press release dated January 09, 2023 Government has notified the standards relating to the imports of USB Type – C cables, connectors and digital TV receptacles to India (IS 18112:2022)
  • Ministry of Commerce & Industry has issued Press Release dated January 20, 2023, confirming that the Quality Control Orders for leather and non-leather footwear shall be implemented with effect from July 01, 2023

6. Conclusion and Key Takeaways

6.1 Other BIS Registrations

  • Hallmark
  • Systems certifications

6.2 Significance

  • Make in India
  • Non-tariff barrier
  • Possible supply chain disruption
  • Relevant business functions: Legal, Exim and Tax

6.3 Compliance is Mandatory

  • Mandatory in nature
  • Not Linked with HSN Code (except Steel and Steel products)
  • Legal framework must be understood & implemented well

6.4 Penal Consequences

  • Non-compliance could be a costly affair
  • Business/goodwill loss could have far-reaching impact

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

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