Centre brings changes in Custom Rules, IGCR 2017 to boost trade facilitation

The Central Government has brought changes in the existing Customs (Imports of Goods at Concessional Rate of Duty) Rules, IGCR 2017 in order to boost trade facilitation.

The changes were introduced by the Central Board of Indirect Taxes and Customs through the Customs (Imports of Goods at Concessional Rate of Duty) Amendment Rules, 2021.

The Custom Rules, IGCR 2017 lay down the manners and procedures in which an importer can avail the benefit of a concessional Customs duty on the import of goods that are required for the domestic production of goods or for providing services.

CBIC issued Circular No.10/2021-Customs, dated 17th May 2021 in order to assist the trade in understanding the improvements in the IGCR, 2017 so that they may make full use of the new facilities. (2/8) pic.twitter.com/xrQKKhripG

— Ministry of Finance (@FinMinIndia) May 18, 2021

What are the new changes in Custom Rules?

• In a statement, the Ministry of Finance informed that one major change in the rules that accommodates the requirements of the trade and industry is that the imported goods have now been permitted to be sent out for job work.

• The absence of the above-mentioned facility had earlier constrained the industry particularly those who are in the Micro, Small, and Medium Enterprises sector which did not have the complete manufacturing capability in-house.

• The Ministry also informed that the importers who do not have any form of the manufacturing facility can now avail the IGCR, 2017 for importing goods at the concessional Customs duty. They can also get the final goods manufactured entirely on the job work basis.

• It must be noted that some sectors such as jewellery, gold, precious stones, and metals have been excluded.

• Another significant incentive now provided is allowing those who import capital goods at a concessional Customs duty to clear them in the domestic market on the payment of duty and interest, at a depreciated value.

Background:

The Union Finance Minister Nirmala Sitharaman had announced in her Budget Speech in 2021 that the Customs (IGCR) Rules, 2017 will be amended for boosting trade facilitation.

As per the announcement, the Central Board of Customs and Indirect Taxes immediately started enhancing the scope of these rules on February 2, 2021.