India Amends Import Rules to Further Facilitate Trade

Posted by Written by Naina Bhardwaj Reading Time: 4 minutes

India’s new customs rules will facilitate trade growth and expand the current regulatory scope. The new rules also apply to importers of gold under the India-UAE CEPA. Called the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) (ICGRS) Rules, 2022, it widens the ambit of the ICGR Rules, 2017. The new ICGRS Rules 2022 includes many new provisions and clarifications, including the time period for utilization of goods, immediate re-credit of bonds, and procedure for cases where the imported goods have a specified end use.

On September 9, 2022, India notified the Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) (ICGRS) Rules, 2022; this has been in effect starting September 10, 2022. The new rules amend the Customs (Import of Goods at Concessional Rate of Duty) (ICGR) Rules 2017.

ICGRS Rules, 2022 was introduced after processing feedback on how India’s regulators could facilitate trade expansion. These rules apply to a broad variety of sectors, including telecom, electronics, and electric vehicles. The ICGRS Rules, 2022 allow importers to import capital goods at a concessional customs duty and clear these goods in the domestic market on payment of duty and interest, at a depreciated value.

It is pertinent to note that these changes widen the scope of coverage of the previous IGCR, 2017 and ensure that useful additional data fields are effectively captured by authorities. The government has clarified that these rules are not a departure from the existing procedure and unless specifically modified, the clarifications provided through circular 48/2017 (dated December 8, 2017), circular 10/2021 (dated May 17, 2021), and circular 04/2022 (dated February 27, 2022), will continue be in effect. Besides, in 2021, India had introduced significant changes simplifying and automating the procedures in ICGR, 2017. 

Below is a roundup of all the modifications introduced by ICGRS Rules, 2022.

Time period for utilization of goods

The new ICGRS Rules 2022 clarify that the time period of utilization is the same as the time period for compliance. When the time period for utilization is specified in the notifications, the said time period will apply. If not specified, the time period of six months will apply.

Further, the ICGRS 2022 Rules introduce a provision wherein the jurisdictional commissioner can further extend such period of six months by another three months in case the importer is unable to utilize goods imported for intended purpose under IGCR, 2017 within the prescribed time period of six months. Such extension will only be granted once the importer furnishes sufficient reasons for not conforming to the time period so prescribed, which were beyond the importer’s control.

Specified end use

IGCRS Rules, 2022 introduce provisions for cases where the intended purpose is for putting the goods imported to specified end use and not necessarily manufacturing or for providing output services. For the same, the Rules have specified the following:

  • The following procedures remain as existing – procedure of intimation, generating a unique IGCR Identification Number (IIN), import of the goods, submission of bond, maintenance of records, filing monthly statement, or any other procedures. The importer shall undertake compliance to the officer having jurisdiction over the primary address specified in the Importer Exporter Code (IEC) issued by the Director General of Foreign Trade (DGFT).
  • Where the import is undertaken for a specified end use and no differential duty is involved, the value of the bond shall be equal to the assessable value of the goods.
  • In cases where the intended purpose of import is supply of the goods to an end use recipient, the importer shall supply these goods under an invoice or where ever applicable, through an e-way bill. The description and quantity of such goods shall be clearly mentioned by the importer.
  • The importer shall maintain a record of all such goods supplied in a month and provide the details in the monthly statement.
  • The restrictions on job work are only relating to the case where it is undertaken on the goods belonging to importer and does not apply to the end use recipient who receives the goods on the supply and deals with it as stipulated in the notification.

This provision has been introduced been introduced to enable the tracking of these goods by the authorities to ensure that the goods are used in specified manufacturing and not in the replacement market.

India-UAE Comprehensive Economic Partnership Agreement

The import of gold under the India-UAE CEPA prescribes tariff rate quotas (TRQ). In this context, the ICRGS Rules 2022 clarify:

  • The importer shall follow IGCRS Rules, 2022 for import of gold under the India-UAE CEPA and supply the gold to end use recipients who are TRQ holders.
  • The importer, having provided a one-time intimation in Form IGCR-1 at the common portal, can generate an IIN number and undertake multiple imports against the same. The details of end use recipient may be mentioned in IGCR-1.
  • Imports pertaining to multiple TRQ holders can be clubbed together and imported in a single lot. However, it is to be ensured that when filing the bill of entry, the quantities against each TRQ holder need to be mentioned as a separate line item.
  • The importer shall maintain records of the supply made to each end use recipient and shall mention the same in the monthly statement under form IGCR-3.
  • The importer shall follow the IGCR procedure till its supply to end-use recipient and filing of monthly statement.

New procedure for immediate re-credit of bonds

The ICRGS Rules, 2022 have prescribed a procedure for immediate re-credit of bonds by the jurisdictional customs officer, rather than waiting till the time of filing the monthly statement.

As a trade facilitation measure, a new Form IGCR-3A has been notified for confirmation of consumption for intended purpose at the common portal at any point in time for immediate re-credit of the bond by the jurisdictional commissioner, without waiting for the filing of monthly statement on the 10th of every month. The details filed in form IGCR-3A shall get auto populated in the monthly statement of the subsequent month, which has to be only confirmed by the importer.

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