IGCR Rules

IGCR Rules 2017

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, is enforced in India from the 1st of July, 2017. These rules are meant for importers who are 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 the manufacture of any commodity or provision of output service. This article provides an overview of these rules.

Exemption Notification

The provisions pertaining to exemption notification is 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 pertaining to 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 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, 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 who are 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 the purpose of manufacture or rendering of output service. The intimation must include:

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

Procedure of Intimation

The following procedures will facilitate the importers to file the information to the concerned Commissioners:

Step 1: Provision of Information

To start with, the concerned importer is required to 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 the purpose of manufacture or rendering of 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 on these imports and the port of import concerning a particular consignment for a period of one year or less.

 Step 2: Submission of Continuity Bond

Now, the importers must submit a continuity bond with the appropriate surety or security. This must be accompanied with an undertaking to any amount which is 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 Information  

The copy of 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 in accordance with 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 are required to 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 un-utilized or defective goods within six months of its 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 the 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, which is calculated from the date of importation of the goods until the date of payment of the actual amount.

Recovery of Duty

In case of any 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, which was remitted by the importer for this purpose.

Other Related Guides

DGFT – Director General of Foreign Trade IDGFT - Director General of Foreign Trade Directorate General of Foreign Trade (DGFT), formerly known as the Chief Controller of Imports and Exports ...
Procedure and Criteria for Import of Power Tillers Procedure and Criteria for Import of Power Tillers The Directorate General of Foreign Trade (DGFT) has specified the Procedure and Criteria for Impor...
Duty Free Import Authorization Scheme Duty Free Import Authorization Scheme Duty Free Import Authorization (DFIA) is a scheme under which duty free import of inputs, fuel, oil, energy sou...
Sanitary Import Permit Procedure to Obtain Sanitary Import Permit As per the regulations by the Ministry of Agriculture, it is mandatory for the animal products importers i...
Steel Import Monitoring System (SIMS) Steel Import Monitoring System (SIMS) SIMS is a licensing program applicable to steel importers. The Government felt the need to introduce a licens...

Post by Sreeram Viswanath

IndiaFilings is India's largest online compliance services platform dedicated to helping people start and grow their business, at an affordable cost. We were started in 2014 with the mission of making it easier for Entrepreneurs to start their business. We have since helped start and operate tens of thousands of businesses by offering a range of business services. Our aim is to help the entrepreneur on the legal and regulatory requirements, and be a partner throughout the business lifecycle, offering support at every stage to ensure the business remains compliant and continually growing.