IGCR: End Use Manufacturing Clarifications Issued by CBIC

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These rules benefit the importers on the consumption of imported goods covered in the notification for the manufacture of any product

Central Board of Indirect Taxes and Customs (CBIC) issued ‘Circular No.10/2021-Customs, dated 17th May 2021’ to amend the Import of Goods at Concessional Rate of Duty (IGCR) Rules, 2017. These rules benefit the importers on the consumption of imported goods covered in the notification for the manufacture of any product.

India Cellular & Electronics Industry (ICEA) and the entire electronics especially the mobile phone industry is encouraged with the amended rules notified in the IGCR rules to boost trade facilitation.

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“We welcome the clarifications on end use manufacturing in the complex customs rules in the Budget 2021 amendments issued in February 2021. The recently notified CBIC circular will create the necessary confidence in industry and boost the eco-system for electronics manufacturing,” noted Pankaj Mohindroo, Chairman, ICEA.

Amendments made

All importers and / or manufacturers are now allowed to get finished goods (100 per cent outsource) and intermediate goods (partial outsource) manufactured on job-work basis. Few sensitive sectors like gold, jewellery and articles thereof, and other precious metals or stone have been excluded from this facility. Refer Rule 6A of the IGCRD Rules.

Importers are now given an option to import capital goods for specified purpose at concessional rate and clear the same after use on payment of applicable customs duties along with interest on the depreciated value, with due permission of the jurisdictional Customs officer. Refer Rule 7(3) of the IGCRD Rules.

More entries in Notification No. 50/17-Cus., dated 30 June 2017 as amended have been brought under the ambit of IGCRD Rules, with the intent to bring uniformity in the procedures for all end-use based exemptions.

Procedural simplification and e-governance

One-time prior intimation: Importer who intends to avail benefit under IGCRD Rules is required to give one-time prior information to the jurisdictional customs officer along with a one-time continuity bond to cover all the imports undertaken under these Rules. Refer Rule 4 of the IGCRD Rules.

Storage of imported goods: The importer is now allowed to store the imported goods at any premises not owned by them, prior to their utilization at the manufacturing premises, provided that the details of such premises are included in the prior information to be furnished under Rule 4 of the IGCRD Rules.

Transfer of goods to another job-worker: The job-worker can send goods to another job-worker, against separate challan or with the same challan of the principal manufacturer itself, duly endorsed by him.

Clearance of goods by job-worker: The goods can be directly cleared for home consumption from job-workers’ premise, provided adequate records are maintained by the importer and subsequently shown in quarterly returns.

Intimation before import: The importer can furnish information as required under Rule 5, to the Customs officer over e-mail on a consolidated basis for a period not exceeding one year rather than in a transactional manner for every import. Refer Rule 5 of the IGCRD Rules.

Clearance of goods from port: At the time of filing Bill of Entry, the importer can upload the intimation filed under Rule 5 on e-Sanchit and link the same with the other import documents, to facilitate the clearance of goods at concessional rate of duty. Refer Rule 5 of the IGCRD Rules

Intimation about receipt of goods: The importer can furnish intimation about the receipt of the goods directly in the premises of a job-worker over e-mail to the jurisdictional Customs Officer (of the job-worker) along with the copy provided to the jurisdictional customs officer (of the importer). Refer Rule 6 of the IGCRD Rules.

Intimation about clearance of goods to job-worker: In case where the goods are received first in importers’ premises, the goods can be sent to job-worker under a challan, after giving an e-mail intimation to the jurisdictional Customs Officer (of the importer). Such intimation is to be given for every month, job-worker wise, by 5th of next month. Refer Rule 6A of the IGCRD Rules.

Re-Export or clearance for home consumption: An importer shall utilize the imported goods for the intended purpose or re-export the same, within a period of six months from the date of import, failing which the importer is liable to payment of duty with interest, as per the procedure laid out in the said IGCR Rules [refer rule 7(1) and 7(2)].

“These amendments will surely go a long way in the ‘Ease of Doing Business’. There are a couple of amendments that have been overlooked and should also be taken into consideration to benefit the manufacturing fraternity,” noted Bibhash Deb, Chairman of GST Taskforce & Indirect Tax Committee, ICEA.

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