CBIC Clarifies Applicability of Concessional Duty under IGCR Rules, 2022
By: Admin
Date: November 22, 2024
Category: CBIC | Notification and Circular > Customs
Reading Time: 4 Minutes
The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 26/2024-Customs on November 21, 2024, to provide much-needed clarity on the applicability of concessional duty under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2022 (IGCR Rules, 2022) in specific scenarios.
Key Clarifications
1. Simultaneous Availment of IGCR and MOOWR
One major area of concern has been the compatibility of IGCR benefits with the Manufacture and Other Operations in Warehouse Regulations, 2019 (MOOWR) scheme.
CBIC reiterated that units operating under Section 65 of the Customs Act can avail themselves of IGCR benefits, but only if certain conditions are met:
- Both schemes must explicitly allow simultaneous availment.
- Importers need to comply with additional requirements under the concessional notification and IGCR Rules, such as adhering to prescribed time limits.
This clarification aligns with FAQs issued earlier to address doubts from stakeholders.
2. Applicability of IGCR Benefits for Intermediate Goods Manufacturers
Another significant clarification pertains to MOOWR units that import components for value addition and supply them to manufacturers of cellular mobile phones under Notification No. 57/2017-Customs.
CBIC emphasized that:
- The phrase “for use in the manufacture of cellular mobile phones” applies to all stages of the manufacturing process.
- Intermediate manufacturers who supply value-added goods to cellular mobile phone manufacturers are eligible for IGCR benefits, provided all prescribed conditions are fulfilled.
Moreover, earlier guidelines under Instruction 16/2024-Customs regarding documentation and accountal by MOOWR units remain applicable.
Implications for Stakeholders
Enhanced Benefits for MOOWR Units
MOOWR units can now confidently avail themselves of both IGCR benefits and duty deferments simultaneously, as long as additional compliance requirements are met.
Support for Intermediate Manufacturers
Intermediate goods manufacturers supplying components to cellular mobile phone manufacturers can claim concessional duties, promoting smoother operations within the industry.
Importance of Adherence
Stakeholders must ensure strict compliance with all relevant conditions to avoid disputes or denials of concessional duty benefits.
Next Steps for Stakeholders
CBIC has directed field formations to issue suitable Public Notices for the benefit of trade and industry.
Stakeholders encountering specific challenges or ambiguities are encouraged to report their concerns to the Board for timely resolution.
For more information, refer to Circular No. 26/2024-Customs issued by CBIC.
