Import of Goods at Concessional Rate of Duty | Apply for IGCR in 2024

What is IGCR?

IGCR, which stands for ‘Import of Goods at Concessional Rate of Duty’, refers to a scheme implemented by the Central Board of Indirect Taxes and Customs (CBIC) that: 

• Offers a relaxation in the rate of duty for specified goods. 
• Applicable only to goods that have been notified for such benefits.
• Particularly advantageous for importers who require specific goods for designated purposes, providing them with financial benefits.
• Importers must apply online through the CBIC portal to claim concessional duty rates for the goods they import.

By adhering to the procedures outlined in the IGCR Rules, importers can take advantage of the concessions provided by Customs, facilitating the importation process for specified goods while ensuring compliance with regulatory requirements.

IGCR Rules

The CBIC administers the IGCR Rules, which delineate key terms crucial for their enforcement. Some of the guidelines outlined for importers under these regulations are: 

• It specifies that the goods listed in the schedule are entitled to concessional duty rates. 
• Importers must provide advance notice of their intention to claim relaxation under the IGCR rules and subsequently submit monthly returns detailing the utilisation of the goods.
• Importers are required to file returns via the ICEGATE portal for their imports. 
• Importers must utilize the imported goods within six months of their importation. 
• If there is no utilisation in a given month, importers can still file a NIL return, but filing returns is mandatory. 
• Importers must forfeit their eligibility for concessions under the IGCR Rules if they fail to utilise the imported goods for their intended purpose within the specified period.

IGCR Rules, 2017

The Customs IGCR Rules 2017, also known as the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2017, came into effect in India on July 1, 2017. These regulations: 

• Designed for importers seeking to benefit from exemption notifications under section 25(1) of the Customs Act, 1962.
• Imported goods specified in the notification must be utilised in manufacturing goods or providing output services.

The benefit of exemption is enshrined in the 2017 Rules as explained below:

Exemption notification

The Customs Act, 1962, under Section 25(1), delineates provisions concerning exemption notifications. The Act authorises the Central Government to grant exemptions on customs duties for certain goods.

The notification for the same is provided if:

• Upon satisfaction of the Central Government regarding public interest, it may issue a notification in the Official Gazette.
• This notification may provide exemptions, either absolute or conditional, for goods of specified descriptions.
• Conditions, whether to be fulfilled before or after clearance, will be outlined in the notification.

Additionally, Section 25(2) allows the Central Government, if deemed necessary in the public interest, to exempt specific goods from duty payment under exceptional circumstances.Such exemptions under Section 25(2) are granted through special orders, each case requiring justification of the exceptional circumstances.

Intimation for availing benefit

Importers seeking exemption benefits must inform the Deputy Commissioner or Assistant Commissioner of Customs at the location where the imported goods will be used. This notice should include:

1. Manufacturer’s name and address.
2. Description of goods produced.
3. Details of imported goods used for manufacturing or service.

Procedure of intimation

Here are streamlined instructions for importers to submit information to the relevant authorities:

Step 1: Provide Information:

Importers must submit relevant information to the Assistant Commissioner of Customs overseeing the area where the imported goods will be used. This information should include estimated quantity and value of the goods, details of any applicable exemption notifications, and the port of import for each consignment lasting a year or less.

Step 2: Submit Continuity Bond:

Importers are required to furnish a continuity bond along with appropriate surety or security. This bond should cover any potential duty differences on inputs, considering exemptions, along with applicable interest.

Step 3: Forward Information Copies:

Copies of the submitted information will be forwarded to the Assistant Commissioner of Customs at the designated Customs Station of Importation.

Step 4: Endorse Benefit:

Upon review, the Assistant Commissioner of Customs will endorse the importer’s eligibility to claim benefits under the provided provisions.

Maintenance of accounts and furnishing returns

Beneficiaries of the exemption notification are required to maintain an account detailing:

•   Quantity and value of imported goods
•   Number of imported goods consumed under the exemption
•   Number of goods re-exported, if any
•   Available stock

These records must be provided to the Assistant Commissioner or Deputy Commissioner of Customs upon request.

Importers falling under this provision must submit a quarterly return by the 10th day of the quarter following the implementation of the provision.

Re-export or Clearance of Unutilized or Defective Goods

Importers covered by these provisions have the right to re-export any unused or faulty goods provided:

• It is done within six months of importation, with endorsement from the Deputy Commissioner or Assistant Commissioner of Customs.
• It is the responsibility of importers to ensure that the value of re-exported goods matches or exceeds their value at the time of import.
• Clearance involves paying import duty equivalent to the difference between the duty levied on inputs and any exemptions already applied during incorporation.
• Payment should include relevant interest calculated from the importation date until the payment date.

Customs (Import of Goods at Concessional Rate of Duty) Amendment Rules, 2022

The Rules of 2022 incorporate procedural measures aimed at ensuring that imported goods are utilised for their intended purpose as outlined in the relevant notification prescribing these rules. 

Refer to the given link to access the 2022 Rules- https://www.salestaxindia.com/DEMO/TreeMenu.aspx?menu=208557

Some of the salient changes brought in by the 2022 Rules include:

1. Clarification regarding the specified time period for utilisation as outlined in the notification for compliance purposes.
2. Inclusion of a provision allowing for extension of the utilisation period under certain circumstances beyond the control of the importer.
3. Definition and application of the IGCR procedure concerning specific end uses as mentioned in Customs Notifications.
4. Requirements concerning surety or bank guarantees to be provided by IGCR advisory for importers under the Rules.
5. Considerations regarding imports conducted by Nominated Agencies for gold, silver, or platinum under replenishment schemes or for export against supply by Nominated Agencies.
6. Amendment of the forms attached to the Rules to include detailed information regarding the intended purpose of import, such as recipient details, usage, supplies made, and exports.

Procedure to avail IGCR

The steps that an importer must adhere to are outlined in The Customs (Import of Goods at Concessional Rate of Duty) Amendment Rules of 2022, detailed as follows:

One-time prior intimation

Rule 4 of 2022 Rules mandates that prior information must be provided by an importer intending to import goods at a concessional rate of duty. This information must be submitted on the common portal in Form IGCR-1 and should include:

1. Name and address of the importer and their job worker.
2. Details of the goods produced or processes undertaken at the importer’s or job worker’s manufacturing facility, if applicable.
3. Description of the imported goods used in manufacturing at the importer’s or job worker’s premises.
4. Specifics of the exemption notification relevant to the import.
5. Nature of the output service provided utilising the imported goods.
6. Intended port(s) of import.

IGCR Identification Number (IIN)

After the information is accepted on the shared portal, a distinctive IGCR Identification Number (IIN) will be created. This data will be accessible to the customs officer in charge of the relevant jurisdiction and to officers at the designated import port via the portal. 

Bill of Entry

The importer must include the IIN and continuity bond number and details when submitting the bill of entry at the import port, as per Rule 5 of the Rules of 2022:

• The Deputy Commissioner or Assistant Commissioner of Customs at the import port is authorised to grant the exemption notification benefits based on compliance with this rule.
• Upon clearance of the bill of entry for home consumption, the importer’s bond is automatically debited within the customs automated system.
• These details are accessible to the relevant customs officer within their jurisdiction through the common portal.

Non-receipt of goods

The Customs (Import of Goods at Concessional Rate of Duty) Amendment Rules, 2022, address the receipt of goods in three situations:

• Goods received at the importer’s premises
• Goods directly received at the job-worker’s premises
• Goods partly received by the importer and partly sent to the job worker’s premises

The requirement to notify the receipt of goods has been eliminated in all these cases.

However, any instances of non-receipt or short-receipt of goods must be promptly reported by the importer through form IGCR-2 on the common portal.

Monthly statement and maintenance of accounts

Under Rule 6 of the Customs (Import of Goods at Concessional Rate of Duty) Amendment Rules, 2022, importers now need to submit a monthly statement by the 10th of the following month via the common portal, using form IGCR-3, replacing the previous quarterly return requirement.

The importer is required to maintain an account pertaining to the goods imported. This account should detail:

1. The value of the imported goods.
2. Dates of receipt of imported goods at the relevant premises.
3. Quantities of goods consumed.
4. Quantities of goods sent for job work, along with the nature of job work undertaken.
5. Quantities of goods received post-job work.
6. Quantities of goods re-exported.
7. Quantities remaining in stock, as per Bills of Entry.

Re-export or clearance of unutilized or defective goods

When an importer decides to re-export goods, they must document export information including the shipping bill number, shipping bill date, and the port of export. These specifics should be associated with the bill of entry, invoice, and item details of the imported goods.

If the importer plans to clear unused or defective goods by paying the required duty and interest:

• The import duty owed will be the discrepancy between the duty applicable to such goods without the exemption and the duty already paid during importation.
• Additionally, interest will be charged at the rate specified in the notification under section 28AA.

Role of ICEGATE in IGCR Implementation

The Central Board of Indirect Taxes and Customs (CBIC) has introduced the Indian Customs Electronic Data Interchange Gateway (ICEGATE), an online platform designed for: 

• The implementation of IGCR rules and other customs-related management tasks.
• Serves as a digital hub for customs authorities to efficiently handle customs formalities. 
• Acts as a communication bridge between traders and customs officials.
• Provides e-filing services, enabling traders to electronically submit requests with ease and reliability.

Through ICEGATE’s IGCR module, importers seeking concessions must provide advance notice by furnishing details of imported goods and their intended usage in accordance with prescribed guidelines. This streamlined process ensures transparency and accuracy in customs operations while facilitating smoother trade transactions.

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Don’t miss out on the opportunity to optimise your import process under the IGCR scheme. Choose JPARKS INDIA as your trusted partner and experience the difference firsthand!

Contact us today to learn more about how we can assist you in importing goods at concessional rates of duty.

Apply for IGCR I FAQs

Who can avail IGCR benefits?

Importers, regardless of whether they possess a full-fledged manufacturing setup, a partially equipped facility, or none at all, are eligible to participate in this scheme.

What is the benefit of IGCR?

IGCR offers the advantage of reduced duty rates, which are implemented by the CBIC to provide relaxation for certain notified goods.

What are IGCR rules?

The Import of Goods at Concessional Rate of Duty Rules, 2017, cater to importers seeking to take advantage of duty exemption benefits.

Why is Icegate important?

Icegate is significant because it enables customs to respond to importers and exporters after assessing Bills of Entry and Shipping bills. It also allows importers and exporters to easily track and view the status of their online documents.

What is the circular of 2022 related to IGCR 2017?

In 2022, CBIC issued a circular regarding IGCR 2017. It offers clarification and guidance on its implementation. The circular addresses procedural requirements and provides extra guidance on documentation and accounting for importers benefiting from concessional rates under IGCR 2017.

What are some of the key provisions of the circular of 2022?

The 2022 circular clarifies procedures for bank guarantees and bonds. It outlines documentation and declaration requirements for importers getting concessional rates. It explains the process for claiming excess IGST refund. The circular offers guidance on valuing imported goods and calculating IGST under concessional rates.

Can I file a monthly return if there is no utilisation of imported goods in the current month?

If you haven’t used any imported goods in a month, you can file a NIL return for that month. Declare lack of utilisation by the 10th of the following month. Simply click the ‘Click to File NIL return’ button on the monthly return screen to submit.

What are the items that can be imported under the revised norms of IGCR?

The revised norms of IGCR now permit the import of Trimmings and Embellishments. Changes have been made to allow the import of Tags, labels, stickers, belts, buttons, hangers, or printed bags. Additionally, the import of lining and interlining material is now facilitated.

Can I enter Bills of entry for Non IGCR items ?

Yes, only Bills of Entry containing IGCR items mapped with valid IIN can be used for monthly return submission.

Where can I find an agent to help me apply for an IGCR?

JPARKS INDIA Pvt. Ltd. aims to facilitate your application for an IGCR. Our team commits to aiding you in registering on the ICEGATE IGCR portal swiftly, typically within four business days. Feel free to explore our services through Google search or visit our website for further information.