Clarifications on the applicability of concessional duty under IGCR Rules, 2022

Clarifications on the applicability of concessional duty under IGCR Rules, 2022 in certain instances

F. No. 524/20/2024-STO(TU)
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Indirect Taxes & Customs)

North Block, New Delhi
Dated: 21.11.2024

Circular No. 26/2024-Customs

To
All Principal Chief Commissioners/Chief Commissioners of Customs/Customs (Preventive).
All Principal Chief Commissioners/Chief Commissioners of Customs & Central Tax
All Principal Commissioners/ Commissioners of Customs/Customs (Preventive)
All Principal Director Generals/Director Generals under CBIC

Subject: Clarifications on the applicability of concessional duty under IGCR Rules, 2022 in certain instances-reg.

Madam/Sir,

Kind reference is invited to the Notification No. 74/2022-Customs (N.T.) dated 09.09.2022 and  Circular  No.  18/2022-Customs  dated  10.09.2022  regarding  Customs  (Import  of  Goods  at Concessional Rate of Duty) Rules, 2022 as amended.

2. Representations  have  been  received  in  the  Board  regarding  the  issues  related  to  the applicability of concessional duty under IGCR Rules, 2022 for MOOWR Scheme. The issues have been examined and the same are clarified as below:

Simultaneous availment of IGCR along with MOOWR:

3.1 Doubts have been raised on the availment of IGCR benefit for the warehoused goods taken for manufacturing simultaneously with the duty deferment under MOOWR and being cleared to DTA or removed to SEZ or to another MOOWR unit.

3.2 In  this  regard,  this  aspect  has  already  been  clarified  under  Question  17  of  FAQs on MOOWR which is reproduced as follows:

“The eligibility to export benefits under FTP or IGCR would depend upon the respective scheme. If the scheme allows, units operating under Section 65 has no impact on the eligibility. In other words, a unit operating under Section 65 can avail any other benefit, if the scheme allows.”

3.3 It is once again re-iterated that, the MOOWR unit may avail IGCR exemption along with duty deferment under MOOWR simultaneously, provided that the importer undertakes to comply with the additional conditions prescribed in the Concessional Notification and IGCR Rules therein including  time-limit  etc.,  in  addition  to  MOOWR  stipulations  for  those  goods  while  supplying goods from its premises.

Applicability of IGCR benefit in certain cases:

4.1 Doubt  has  been  raised  about  the  availability  of  IGCR  benefit  for  the  MOOWR  unit involving  in  import  certain  goods  specified  in  the  notification  for  value-addition  by  way  of manufacturing   under   MOOWR   and   further   supplies   the   value-added   goods   to   the   final manufacturer  of  cellular  mobile  phones.  This  doubt  has  arisen  especially  in  reference  to  the Notification  No.  57/2017-Cus  dated  30.06.2017,  as  amended  wherein,  at  a  few  entries/serial numbers such as 5C to 5E, description of goods is mentioned including the expression “for use in manufacture of cellular mobile phones”.

4.2 It may be noted that, CBIC Instruction 16/2024-Customs dt. 25.06.2024 already clarifies the  procedure  to  be adopted  for  import  of  goods  by  a  unit  in compliance  with  the  provisions  of MOOWR and transfer of resultant goods to another unit. Further, there is a clear documentation involving transfer and periodical accountal by the MOOWR units.

4.3 Accordingly, it is clarified that the expression “for use in manufacture of cellular mobile phones” is  intended  to convey  that  the  component  should  be  used  in manufacturing  process  for cellular  mobile  phones.  This  does  not  mean  that  the  components  should  be  imported  by manufacturer of cellular mobile phones. Therefore, the goods being imported by the intermediate goods manufacturer who is MOOWR unit for further supplying after some manufacturing/ value addition  to  the  final  manufacturer  of  Cellular  mobile  phones  are  duly  eligible  for  the  benefit  of concessional rate of duty under IGCR Rules, 2022, as long as all other conditions are met.

5. Suitable  Public  Notice  may  kindly  be  issued  for  guidance  of  the  trade.  Any  difficulties faced or doubts arising in the implementation of this Circular may please be brought to the notice of Board.6.Hindi version follows.

Yours faithfully

(Jitender Singh)STO (Tariff Unit)

Download Circular No. 26/2024-Customs Click Here >>

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