This Tax Alert summarizes a recent Circular issued by Central Board of Indirect Taxes and Customs (CBIC) on Customs (Import of Goods at Concessional Rate of Duty or for Specified End Use) Rules, 2022 (IGCRS Rules). These rules supersede the existing Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 (IGCR Rules).
The key clarifications are as follows:
- Basic contours of IGCR Rules have been retained. Changes made are to broaden the scope of IGCR and capture additional useful data fields in forms.
- The scope of IGCRS Rules is widened to include cases where imported goods are utilized for specified end use which can be other than manufacturing or providing output services.
- Where time period for utilization of goods is specified in respective notifications, the said period will apply. If the same is not specified, time period of six months will apply. Jurisdictional Commissioner can extend such period by another three months in cases where the delay in utilization is beyond importer’s control.
- Procedures have been prescribed for immediate re-credit of Bonds by jurisdictional AC/DC, rather than waiting till the time of filing the monthly statement.
Comments:
- CBIC had introduced simplified system-based procedure for IGCR rules through ICEGATE portal. It is expected that new IGCRS rules would help in achieving complete automation of the procedure involved.
- Additional data fields prescribed under IGCRS rules would help tax authorities to check and monitor the end use of imported goods.
- Enabling extension of time period for utilization of goods and immediate re-credit of bond are taxpayer-friendly measures and a welcome move.
- Presently, we understand that there are practical challenges in implementing IGCR rules in ICEGATE portal. The same needs to be addressed by Government for effective implementation of IGCRS rules.
