Igcr Rules 2017

The Customs Igcr Rules 2017, which, when expanded, is the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2017, have been enforced in India from the 1st of July, 2017. These rules are meant for importers desirous of availing the benefit of an exemption notification issued under sub-section (1) of section 25 of the Customs Act, 1962. The benefit of such exemption hinges on the utilization of imported goods covered in the notification for manufacturing any commodity or providing output service. This article provides an overview of these IGCR rules.

What is the IGCR Full Form?

The IGCR Full Form is the Import of Goods at Concessional Rate of Duty. This scheme allows certain goods to be imported into India at a relaxed rate of customs duty, provided they meet specific criteria set by the government. Typically, this concession is granted to promote industries, support innovation, or fulfil particular policy objectives. To benefit from this scheme, importers must ensure that the goods are used for the purposes specified under the concessional rate provisions.

Exemption Notification

The provisions about exemption notification are enshrined in sub-section (1) of section 25 of the Customs Act, 1962. The Act empowers the Central Government to grant exemptions for goods from the payment of customs duties. The notification about the same is drafted below for your reference: “If the Central Government is satisfied that it is necessary for the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of the duty of customs leviable thereon. 1[(2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, be exempt from the payment of duty under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable.].”

Intimation of Desire

Importers desirous of availing the benefits of an exemption as specified above must intimate the Deputy Commissioner or the Assistant Commissioner of Customs having jurisdiction over the particular premise where the imported goods are to be utilized for manufacture or rendering of output service. The intimation must include the following:

The name and address of the interested manufacturer.
The goods produced at the manufacturing layout.
The nature and description of imported goods utilized for manufacturing or rendering output service.

Procedure of Intimation

The following procedures will facilitate the importers to file the information to the concerned Commissioners as per IGCR Rules: Step 1: Provision of Information To start with, the concerned importer must furnish the relevant information in duplicate. The information must be addressed to the Assistant Commissioner of Customs, having jurisdiction over the premises where the imported goods are to be utilized for manufacturing or rendering output services. The information must include (in addition to the ones specified above) the estimated quantity and value of the goods to be imported, particulars of the exemption notification applicable to these imports, and the port of import concerning a particular consignment for one year or less. Step 2: Submission of Continuity Bond The importers must submit a continuity bond with the appropriate surety or security. This must be accompanied by an undertaking to any amount equivalent to the difference between the duty leviable on inputs but for the exemption that has already been remitted (if any) at the time of importation, along with the relevant interest. Step 3: Forwarding the Copies of the Information The copy of the information received from the importer will be forwarded to the Assistant Commissioner of Customs at the Customs Station of Importation. Step 4: Endorsement of Benefit After scanning the information, the Assistant Commissioner of Customs will permit the importer to claim the benefit of this provision.

Furnishing Information of the Receipt of Imported Goods

Apart from the above mentioned information, importers desirous of availing the benefits of this provision are required to furnish the information of the receipt of imported goods in operational premises within two working days of receiving the goods. These details must be presented to the Jurisdictional Customs Officer.

Maintenance of Accounts

The beneficiaries of the exemption notification are mandated to maintain an account that portrays the quantity and value of goods imported, the number of imported goods consumed by the provisions of the exemption notification, the number of goods re-exported (if any), and the available stock. The same must be produced to the concerned Assistant Commissioner or Deputy Commissioner of Customs on demand.

Furnishing of Returns

Importers covered under this provision must file a quarterly return by the 10th day of the quarter, succeeding the date of implantation of the provision.

Re-export or Clearance of Unutilized or Defective Goods

Importers covered under these provisions are entitled to re-export the unutilized or defective goods within six months of their import based on the endorsement of the concerned Jurisdictional Deputy Commissioner or the Assistant Commissioner of Customs. The importers must take adequate care to ensure that the value of the re-exported goods isn’t lesser than its value at the time of import. Importers are also entitled to clear unutilized or defective goods with the permission of the concerned commissioner within six months of importing such goods. This can be pursued on payment of import duty which is equivalent to the difference between the duty leviable on inputs but for the exemption that has already been remitted (if any) during incorporation. The payment must be supported with the relevant interest, calculated from the date of importation of the goods until the payment date of the actual amount.

Recovery of Duty

In case of failure in the re-export or clearance of unutilized goods, the Deputy Commissioner or the Assistant Commissioner of Customs may invoke the bond to initiate the recovery proceedings of the import duties that the importer remitted for this purpose.

Back to Learn

Frequently Asked Questions

Common questions about Customs IGCR Rules 2017: Concessional Duty Insights.

The IGCR scheme, or Import of Goods at Concessional Rate of Duty, allows importers to bring certain goods into India at a reduced customs duty rate. Its purpose is to promote industries, support innovation, or fulfill specific policy objectives set by the government.

Importers desirous of availing the benefit of an exemption notification issued under sub-section (1) of section 25 of the Customs Act, 1962, are eligible to avail the benefits under the IGCR Rules. The imported goods must be utilized for manufacturing any commodity or providing output service.

Importers must intimate the Deputy Commissioner or Assistant Commissioner of Customs with details such as the importer's name and address, the goods produced at the manufacturing facility, the nature and description of imported goods, the estimated quantity and value of the goods to be imported, and the applicable exemption notification.

A continuity bond is a surety or security that importers must submit along with an undertaking to pay the difference between the duty leviable on inputs but for the exemption, and the relevant interest. This bond ensures compliance with the IGCR Rules and facilitates the recovery of duties if required.

Importers must maintain an account that shows the quantity and value of goods imported, the number of imported goods consumed under the exemption, the number of goods re-exported (if any), and the available stock. They must also furnish quarterly returns by the 10th day of the succeeding quarter.

Importers can re-export the unutilized or defective goods within six months of import, or clear them by paying the applicable import duty and interest. If neither option is exercised, the Customs authorities can initiate recovery proceedings using the continuity bond.

Importers must first intimate the Assistant Commissioner of Customs with the required information. After receiving endorsement, they can claim the IGCR benefit at the time of import by presenting the necessary documents and the endorsed copy of the information.

The intimation provided by importers for availing the IGCR benefit is valid for one year or less, depending on the estimated quantity and value of goods to be imported.

The exemption notification, issued under sub-section (1) of section 25 of the Customs Act, 1962, allows the Central Government to grant exemptions for goods from the payment of customs duties, either absolutely or subject to certain conditions.

If importers fail to re-export or clear unutilized goods within the prescribed time frame, the Customs authorities can invoke the continuity bond and initiate recovery proceedings for the import duties and interest that were initially exempted under the IGCR Rules.