Ministry of Finance, through a circular dated 9th September 2022, has notified the Customs (Import of Goods at Concessional rate of Duty for specified end use) Rules 2022, hereinafter referred to as the IGCR rules 2022. These rules were enacted to specify and harvest information related to exporting and importing different goods into the country. These rules have superseded the rules made on IGCR in the year 2017 and brought about the required changes in the framework for establishing additional control in importing goods in the country. After these fresh rules were enacted, these rules were amended twice in 2022. The February amendment made drastic changes in the procedure followed, which was made online for better tracking of imported goods.
The new rules have kept intact the provision introduced in the February update of IGCR, and this latest amendment focuses on the introduction of IGCRS for specified end use. Until now, the regulation of the IGCR was restricted to the importers who sought to import goods to aid their manufacturing services. But with the latest amendment, the government is expanding the scope for the specified end use of the product other than the manufacturing service or provision of output service. This article provides a detailed insight to the IGCR rules 2022 issued by the Ministry of Finance in September 2022.
Let’s look at the essential definitions covered under the IGCR rules 2022;
According to the Act, Job Work means any manufacture, process or treatment consistent with the notification undertaken by any person on any goods that belong to the importer except gold, jewellery and articles thereof.
Jurisdictional Custom Officer
A jurisdictional Custom officer has been defined as an officer of customs of a rank equivalent to the superintendent of Appraiser who possesses jurisdiction over the following:
- The premise where the imported goods are put to manufacture or to render output service
- The primary address as specified in the IEC issued by the Directorate General of Foreign Trade
Specified End Use:
In the rules specified, end-use is defined as dealing with the goods imported in a specified manner that is elucidated in the notification. This also includes the supply of those goods to the intended recipient, which may be specified as the end-use recipient of the goods thus imported.
One-time Information by the Importer under the IGCR Rules 2022
- The importer has to provide one-time information to the authority in the common portal in the Form IGCR-1, with the following particulars;
- Information related to the name and address of the importer and his Job Worker
- Details of the goods produced or process undertaken by the importer or the job worker at the manufacturing facility
- The nature and description of goods that are being processed or manufactured by the importer at the unit
- All the particulars of the notification applicable to such import
- Information on the nature of output service rendered utilising the goods imported
- Particulars of the premise that is intended to use in the transfer of goods
- Intended ports of import
- After submission of the information mentioned above by the importer and acceptance of information by the IGCR, an Identification number (IIN) shall be generated against the information.
- Any importer that wishes to avail the benefits of notification shall submit a continuity bond with a surety prescribed by the Deputy Commissioner or Assistant Commissioner of Customs who possesses jurisdiction over the manufacturing unit or for rendering output service and being put to use for a specific end-use. Such request shall be accommodated with an undertaking to pay the following.
- The difference between the exemption provided in the notification and the amount paid by the importer, along with interest calculated from the date of import of goods on which exemption was availed to the date the importer paid the amount.
- In all cases where the notification is other than the exemption benefit, the amount then equals the assessable values of the goods imported.
Procedure for availing of the benefits
The importers who intend to avail the benefits under the IGCR rules 2022 of the exemptions shall;
- They are required to mention the IIN, continuity bond number and details while filing the bill of entry
- The deputy commissioner of customs or from case to case Asst. The Commissioner of Customs at the station of importation shall allow the benefit of the notification to the importer
- The details of automatically debited bonds shall be readily available for submission to the jurisdictional Customs Officer.
Maintenance of records by the Importer under IGCR Rules 2022
- The importer must necessarily maintain the accounts that indicate the following;
- Value and Quantity of goods imported.
- Date and quantity of the goods received at the relevant premises
- The number of goods consumed domestically includes the quantity of manufacture and export for fulfilling the intended purpose and the quantity sent to the end recipient of the goods.
- The number of goods sent for job work and nature of the job work carried out.
- Quantity of the goods received after job work
- Under Rule 10 the quantity of goods re-exported, if any, and
- The quantity that is remaining in stock, according to the bills o entry
- The importer must produce the following documents as and when required by the Deputy Commissioner of Customs, or the case may be the Assistant commissioner of customs who has the jurisdiction over the premise or where the goods are imported shall be put to manufacture/
- In case of short receipt or non-receipt of goods in the property, then the commissioner, through form IGCR-2, shall intimate the importer.
- The importer shall submit a monthly statement o the common portal in the Form of IGCR-3 by the tenth day of every month.
Procedure for supplying imported goods to the end-use recipient
- The importer should maintain a record of the goods supplied to the end user for every month and mention the details in the financial statements.
- The importer shall send the good under an invoice by way of a bill as specified in the CGST Act 2017
- In case of supply for export or relinquishment, the end user shall;
- Maintain all the required accounts of receipt of goods, manufacturing processes, and waste generated thereof
- Production of account details before the jurisdictional custom officer
- Providing the relevant details to the importer for the fulfilment of the benefit.
Salient changes in the ICGR Rules, 2022
The 2022 rules have made the following amends in comparison to the ICGR rules 2017;
- The time period for the utilisation is to be the time period for compliance has been clarified in the notification.
- Addition of provision for extending the utilisation period or reasons beyond the importer’s control
- The scope of the ICGR extended to the end use of the goods as mentioned in the Customs Notification.
- The bank’s guarantee or security has to be furnished by the importer has been specifically mentioned in the rules.
- Different aspects related to imports by Nominated agencies importing Gold/Silver/Platinum under the scheme of replenishment.
- The forms have been amended in the new draft rules to specify and capture details such as end-use recipient, the intended purpose of the import and the supply made to export.
Customs (Import of Goods at Concessional Rate or Duty or for specified End Use) Rules, 2022, provide for the procedural safeguard for ensuring that the goods are imported for a purpose and in accordance with the notification prescribing such rules. These amended rules have further broadened the scope of IGCR to notifications other than the exemption notification. It focuses on the intended usage of the imports, such as end use, supply to end use recipient, manufacturers, exports etc., as mentioned in the Custom Notifications, with a priority focus on end-to-end automation of the process. The IGCR rules 2022 are thus an important step taken by the government to streamline and check the usage of the imported materials, this will help in eradication of false practices and help the government in generating revenue.
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