IGCR – Import of Goods at a Concessional Rate of Duty

IGCR means the import of goods at a concessional rate of duty. the relaxation in the rate of duty is provided by the CBIC through the implementation of IGCR. the IGCR rules govern the provisions for the same.

The concerned authority 

IGCR module is developed by ICE GATE, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS [ CBIC ] to provide digital services to importers to avail benefits under the IGCR rules. 

Introduction 

The Ministry of Finance, addressed a circular on 10 September 2022, has notified the customs import of goods at a concessional rate of duty for specified end-use rules 2022, hereinafter referred to as the IGCR rules 2022. These rules were enacted to specify and harvest information related to exporting and importing different goods into the country.

• Customs IGCR Rules, 2022 Provides procedural safeguards to ensure that the goods imported are used for the purpose.
• Significant amendments were introduced to the customs rules, in 2017,2021 and March 2022 with a focus on automation and making the entire process contactless. 

Scope of IGCR 

The IGCR rule further broadens the scope of IGCR to capture the intended purpose of import such as 

• Specified end use 
• Supply to end-use recipient 
• Manufacture 
• Exports 

Mentioned in the customs circular with a focus on end-to-end automation.

Who can avail of IGCR benefits?

• Importer 
• Custom brokers 
• Stakeholders 

Importers with an incomplete manufacturing facility or none can also use this scheme and undertake manufacturing using job work.

Capital goods – after budget 2021, capital goods imported at a concessional rate can be cleared to a domestic area on payment of duty and interest at a depreciated value.

Goods imported – details of goods imported by the importer 

Job worker and unit transfer detail – details of goods shared from job work 

Re-export – details of goods re-exported 

Home consumption – details of goods cleared in the domestic market after payment of duty. 

Registration of IIN by the importer at ICE GATE 

An importer who intends to avail the benefit of IGCR exemption notification shall submit a prior intimation request of such goods being imported under the IGCR module at the ICE GATE portal. Consequently, an IGCR identification number IIN would be generated by the system. This information shall be made available through the common portal to the jurisdictional customs officer as well as the officers at the respective port of import.

Avail of IGCR benefits 

The importer who intends to avail the benefit of an exemption notification shall submit a continuity bond with such surety or security as deemed appropriate by the deputy commissioner of customs or the assistant commissioner of customs as the case may be, having jurisdiction over the premises where the goods imported shall be put to use for the manufacture of goods or for rendering output services, with an undertaking to pay the amount equal to the difference between the duty leviable on inputs but for the exemption and that already paid, if any, at the time of import, along with interest, at the rate fixed by notification issued under section 28 AA of the act, for the period starting from the date of import of the goods on which the exemption was availed and ending with the date of actual payment of the entire amount of the difference of duty that importer is liable to pay.

Procedure to be followed 

• The importer who intends to avail the benefit of an exemption notification shall mention the IIN and continuity bond number and details while filing the bill of entry.
• Accordingly, the deputy commissioner of customs or the assistant commissioner of customs as the case may be, at the customs station of importation, shall allow the benefit of the exemption notification to the importer.
• Once a bill of entry is cleared for home consumption, the bond submitted by the importer gets debited automatically in the customs automated system. The details shall be made available electronically to the jurisdictional customs officer.

Provisions for IGCR 

The broad provisions are as follows 

• Available post log-in on ICE GATE for importer in their existing account, registered with valid DSC.
• Provision of declaration of advance intimation of import of goods at concessional rate of duty 
• Generation of a unique IIN for a financial year with a facility to amend as and when required 
• A continuity bond of IGCR bond type is created or amended by the importer.
• Bond management module 
• Multiple details are auto-populated in the monthly statement.
• Interface details entered by the user are provided to the jurisdictional customs officer.
• This advisory is a complete step-by-step guide for the user to declare an advance intimation of –           goods to be imported

            access the continuity bond management module

            File monthly return statements 

IGCR Rules 

The CBIC has implemented the IGCR Rules, which require importers to ensure that their imported goods are used for their intended purpose. To comply with these rules, importers must provide prior intimation of their intention to claim relaxation under the IGCR Rules and file monthly returns for the utilization of goods via the ICEGATE portal. Goods must be utilized within six months from the import date. Failure to comply with these rules will result in the importer being liable to repay the excess duty to the CBIC, along with applicable interest.

Goods imported by bonafide exporters

The following goods are imported by the bonafide exporters for use in the manufacturing of handicraft items under chapters 39 & 48 for export as follows –

• Back of photo frames, fittings for photo-frame / box 
• Motifs for attachment on export products 
• Decorative paper for lamp side 
• Prints for photo frames 
• Hardware brass and metal fittings for furniture 
• Handles/blades for cutlery 
• Inlay cards, sensors, stickers, poly bags, alarm tags alarm chips security chips 
• Zippers, zipper heads, fasteners, pullers, sliders, end stoppers, eyelets, hooks, eyes, rivets, studs, buttons, magnet buttons, buckles fusible embroider prints, sequins, metal chain, dog hook, d ring,o ring, bridge fitting, metal frame/bag frame, metal letters / interior plate/logo.
• Faucet/lotion pump for dispensers of plastic / stainless steel / metal.

Following goods when imported by bonafide exporters for use in the manufacturing of leather or synthetic footwear or other leather products under chapters 39 & 48 for export as follows –

• Buckles D rings and O rings eyelets, hooks and eyes, rivets, studs, decorative fittings and metal trimmings 
• Buttons and snaps fasteners, zip fasteners 
• Locks including magnetic locks 
• Metal handles, handle fittings, handle holders, metal frames, dog hooks, logos of all types, ring binders, key hooks, key rings, key holders, push clips, chains, pullers, parts of pullers, hinges and magnetic snaps.
• Loop rivets and loop ovals 
• Packaging boxes 
• Saddle tree 
• Fittings, snaps of metals or alloys. 
• Metal fittings, embellishments, webbing of any material for making harness and saddlers items.
• Stirrup of any material and stirrup bars used for making saddle tree.
• Artificial fur and alarm tag.
• Magnets for use in leather goods ( m) micro pak labels.
• Wet blue chrome tanned leather

Synopsis of customs IGCR amendment rules 2022 

Customs IGCR Rule 2022 applies to an importer who intends to avail the benefit dependent upon the use of the goods imported being covered by that circular for the manufacture of any commodity or provision of output service or being put to a specified end-use.

• Under this rule, the importer shall provide one-time prior information on the common portal, in form IGCR -1 containing the particulars such as name and address of the importer, nature and description of goods imported, and particulars of notification on such import.
• For the convenience of importers to know their jurisdictional customs officer for IGCR, jurisdiction-based mapping has been published on the CBIC website.
• On acceptance of the information by the jurisdictional officer on the portal, an import of goods at a concessional rate of duty IGCR, identification number IIN shall be generated against such information.
• The IIN number is quoted by the importer while filing the bill of entry to claim the benefit of the notification 
• Where a bill of entry is cleared for domestic consumption, the bond submitted by the importer gets debited automatically in the customs automated system and the details shall be made available electronically to the jurisdictional customs officer.
• The importer shall submit a monthly statement on the common portal in the form IGCR 3 appended to these rules by the tenth day of the following month, provided that the importer may submit details of goods consumed in the form IGCR – 3A at any point of time, for immediate recredit of the bond which shall become a part of the monthly statement of the subsequent month 

New amendment of 2022 as compared to 2017 

Customs dated 10 August 2022 clarifies various aspects related to the rules –

• Clarifying the period of utilization to be the period for compliance as addressed by the notification
• A provision to extend the said period of utilization in certain cases for reasons beyond the importer’s control 
• Scope of the IGCR procedure applicable to specified end use mentioned in customs notification 
• Norms about surety/bank guarantees that need to be furnished by importers under these rules 
• Aspects related to imports by nominated agencies importing gold/silver/platinum under the schemes for replenishment or export against supply by nominated agencies.
• The forms appended to the rules have been amended to capture the details of the intended purpose of import such as details of end-use recipient and supply made therein, exports.

Exemption 

In case of non-receipt or short receipt of goods imported in the relevant premises, the importer shall intimate such non-receipt immediately on the common portal in the form IGCR 2.

Responsibility of stakeholder 

Responsibility of the importer 

• Maintaining the record of the goods sent for job work 
• The importer shall send the goods to the premises of the job worker as per the relevant laws of GST 
• The maximum period allowed for job work is 6 months.
• If the importer is unable to establish that the goods sent for job work have been used according to the rules, then necessary action shall be taken by the customs officer.

Responsibility of the job worker 

• Maintain a record of the receipt of goods, manufacturing process and the waste generated 
• Produce the account details before the jurisdictional customs officer as and when required by the said officer 
• After completion of the job work send the processed goods to the importer or another job worker as directed by the importer for carrying out the remaining processes. if any under the cover of an invoice or electronic way bill.

Procedure for allowing imported goods for unit transfer 

The importer shall maintain a record of the goods sent for unit transfer during the months and mention the same in the monthly statement.

The importer should send goods under an invoice or wherever applicable through an e-waybill as specified in Central Goods and Services Tax 2017 mentioning the description and quantity of the goods 

The importer shall concerning the transfer of goods to another unit 

• Maintain an account of receipt of goods, manufacturing process undertaken thereon and the waste generated, if any during such process 
• Produce the account details before the jurisdictional customs officer as and when required by the said officer 
• After completion of the said process, send the processed goods back to the premises of the importer from where the goods were received or to the job worker for carrying out the remaining processes if any under the cover of an invoice or an e-waybill.

Importers need to provide prior

The importer shall provide one-time information on the common portal in form IGCR-1 containing the following particulars 

• The name and address of the importer and his job worker. 
• The goods produced or processed are undertaken at the manufacturing facility of the importer or his job worker if any or both 
• The nature and description of goods imported used in the manufacture of goods at the premises of the importer or the job worker if any 
• Particulars of the exemption notification applicable on such import 
• Nature of output services rendered utilising the goods imported 
• The intended port of import.

 On acceptance of the above-mentioned information, an import of goods at a concessional rate identification number IIN shall be generated against such information furnished.

Importers need to maintain records 

Importers are required to keep a record of the quantity of goods imported, according to the customs IGCR amendment rules of 2022. Maintaining an accurate account is crucial to ensure compliance with regulations and avoid legal issues.

• Value of goods imported 
• Date of receipt of the goods imported in the relevant premises 
• Of such goods consumed 
• Of goods sent for job work, nature of job work carried out 
• Of goods received after job work 
• Of goods re-exported if any 
• Remaining in stock, according to bills of entry.

The procedure to be followed by an importer 

A one-time prior intimation of intent to avail of IGCR benefits 

Prior intimation of intent

• An importer who intends to import goods at a concessional rate of duty shall give a one-time prior information of such goods being imported. this information shall be provided on the common portal in form IGCR – 1.

 

• Subsequently upon acceptance of such information on the common portal, a unique IGCR identification number IIN shall be generated. this information is also made available through the common portal to the jurisdictional customs officer as well as the officers at the respective port of import. the importer also has an option to update the form IGCR -1 in case of any change in the details.

 

• It is clarified that in the case of units already covered under the existing provisions of IGCR rules 2017, the importers shall record electronically such details of intimation given in the form IGCR – 1 on the common portal and generate an IIN against the same.

Bond bank guarantee 

• The importer is required to furnish a one-time continuity bond, in a format provided in the circular to cover all the imports undertaken under this procedure. the importer shall fill up the bond details such as the amount of the bond on the common portal in part B of the form IGCR 1.

 

• Subsequently, the physical copy of the bond and bank guarantee, wherever applicable, shall be submitted by the importer to the jurisdictional officer. upon acceptance , the jurisdictional customs officer shall approve the bond request on the customs automated system.

 

• The details of the bond number and bank guarantee will then be available for the importer to see on the common portal. The importer shall also have the option of topping up the bond amount and adding the details of the bank guarantee on the common portal and by providing a bond addendum to the bond for adding bank guarantee as per the format.

 

• It is clarified that if the bond/bank guarantee has already been furnished to the jurisdictional officer, there is no requirement to give a fresh bond/bank guarantee. the jurisdictional officer shall enter the details of such bond/bank guarantee in the customs automated system and generate the bond number.

Bill of entry at the port 

The importer should mention the details of IIN, bond number and other details in the bill of entry based on these details, the deputy commissioner or the assistant commissioner of customs allows the benefit of exemption and import is executed at a concessional rate.

Utilization of bond 

When the bill of entry is cleared for domestic consumption, the bond amount is debited through the automated IGCR system.

Intimation of goods received 

The IGCR rules recognize the receipt of goods on the importer’s premises and the job worker’s premises. But in case the goods are received at some other location or there is any short receipt of a portion of goods then the same shall be intimated by the importer through the common portal.

Import of goods at a concessional rate 

The importer shall mention the IIN and the continuity bond number and details while filing the bill of entry at the port of import.

• based on the same, the deputy commissioner or assistant commissioner of customs at the port of importation shall allow the benefit of the exemption notification.
• once a bill of entry is cleared for home consumption, the bond submitted by the importer gets debited automatically in the customs automated system. these details shall be available to the jurisdictional customs officer through the common portal.

Receipt of goods from an importer 

The receipt of goods has three scenarios 

• Goods are received on the premises of the importer. 
• Goods are directly received at the premises of the job worker. 
• Goods are partly received at the importer’s and partly sent to the job worker’s premises 

The requirement of intimating the receipt of the goods has been done away with. however, any non-receipt or short receipt of the goods shall be intimated by the importer immediately on the common portal through form IGCR -2 This intimation shall be based on the IIN  and details shall be provided against each bill of entry, invoice and item.

Goods sent for job work from importer’s premises 

According to customs amendment rules 2022 if the goods are first received at the premises of the importer and are then to be sent for job work therefrom, the importer shall send the goods under the cover of an invoice or wherever applicable, through an e-way bill specifying the description and quantity of goods.

• it is clarified that the requirement of an intimation when sending goods for job work has been done away with.
•  the importer shall maintain a record and mention such details in the monthly statement. 
• The maximum period for which the goods can remain with the job worker shall be six months from the date of invoice or e-waybill.

Receipt of goods from the job worker 

There are three scenarios for the receipt of goods from the job worker.

• The goods are received back in the premises of the importer 
• The goods are cleared directly from the premises of the job worker 
• The job worker sends the goods to another job worker.

In all such cases, the goods shall be sent under an invoice or wherever applicable, e-way bill. the importer shall maintain a record of such movement of goods and mention the details in the monthly statement.

Inter-unit transfer of goods 

A separate provision has been included for unit transfer of goods, where goods are sent to a different unit of the same importer. the goods, in such cases, shall be sent under an invoice or wherever applicable, an e-waybill, mentioning the description and quality of the goods.

Utilization of goods for intended purpose 

The importer who has availed the benefit of an exemption notification shall use the goods imported following the conditions specified in the concerned exemption notification within six months from the date of import and concerning unutilised or defective goods so imported, the importer has an option to either re-export such goods or clear the same for home consumption within the said period.

 Re-export or clearance of goods for home consumption                                                                                The importer who opts to re-export such goods, as specified, shall record the details of necessary export documents in the monthly statement.

The details of export documentation are as follows –

• Shipping bill number 
• Shipping bill date 
• Port of export 

These details shall be specified against the bill of entry, invoice and item details of the goods imported.

The value of such goods for re-export shall not be less than the value of the said goods at the time of import.

• The importer who opts to clear the unutilised or defective goods for home consumption as specified shall pay the duty along with interest on the common portal and the particulars of such clearance and the payment of duty shall be recorded by the importer in the monthly statement.
• The importer shall pay such duties and interest using a manual challan at the port of import.
• The importer has an option to clear the capital goods imported, after having been used for the specified purpose on payment of duty equal to the difference between the duty leviable on such goods but for the exemption availed and that already paid, if any, at the time of importation, along with interest, at the rate fixed by the notification issued under section 28 AA of the act, on the depreciated value allowed in straight line method as specified below 

            For every quarter in the first year   –   4% 

           For every quarter in the second year  – 3% 

           For every quarter in the third year     –    3% 

           For every quarter in the fourth and fifth year – 2.5%

          And after that for every quarter     –  2%

For computing the rate of depreciation for any part of a quarter, a full quarter shall be taken into account.

The depreciation shall be allowed from when the imported capital goods have come into use for the purpose specified in the exemption notification up to the date of its clearance.

• The importer shall record the particulars of such clearance and payment of duty in the monthly statement.

Penalty for contravenes of rules for re-export / legal consequences 

Importers and job workers must adhere to the provisions of the Customs IGCR Amendment Rule 2022, as any violation of these regulations may lead to penalties. In cases where importers fail to comply with the specified conditions or where payments are not made in full or are short-paid, the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as applicable, will take action by invoking the bond to initiate recovery proceedings. This will involve recovering an amount equal to the difference between the duty leviable on such goods, but for the exemption, and that already paid at the time of importation, along with interest calculated at the rate fixed by the notification issued under section 28 AA of the Act. The period for which interest is calculated will begin from the date of import of the goods on which the exemption was availed and end with the date of actual payment of the entire amount of the difference of duty that the importer is liable to pay.

Monthly statement and maintenance of an account 

• The importer shall submit a monthly statement by the tenth day of the following month, on the common portal in the form IGCR 3 prescribed. it is clarified that the first monthly statement under the changed procedures shall be submitted by the importers in April 2022.

The importer shall maintain an account 

• concerning the goods imported
• concerning an inter-unit transfer of goods, 

These accounts shall be produced by the importer to the jurisdictional deputy/assistant commissioner of customs.

• The job worker shall also maintain an account as prescribed which shall be produced to the jurisdictional customs officer.

Non-compliance 

An importer or the job worker who contravenes the provision of these rules shall be liable to a penalty as prescribed.

In addition to any other action taken under the Customs Act 1962 for recovery of duties.

 

Transitional measures 

 

• To account for the stock of goods imported under IGCR that already exist in the premises of the importer or job worker on the date of transition to the new procedure, an option is being provided to the importer to record the details of all such goods according to the bill of entry, invoice and item, in the monthly statement by linking their past bills of entry in the common portal.
• The details of the existing bonds under IGCR shall be entered into the customs automated system by the jurisdictional officers and the amount of surety/bank guarantee shall be determined following the circular dated 8 December 2017 
• An importer shall have the option to submit a procurement certificate for the import of goods at the port of import to avail of the exemption benefit.
• Currently, there is a requirement for EOU  to follow customs IGCR 2017  to be eligible for claiming exemption of duties/taxes on the import of goods.

   

Procurement certificates can continue to be submitted by the EOU for the import of goods instead of generating IIN in the system.

 

Declaration at the time of filing of bill of entry  

For availing of IGCR benefits, the importer/customs broker has to mandatorily declare the IIN in the certificate number column with the certificate type as EI  in the certificate table of the bill of entry. 

In addition, the bond code should be declared as EI along with the bond number which was registered by the importer associated with the concerned IIN and the port code corresponding to the EPC where the bond was accepted in the bond table of entry. the importer shall declare the IIN, IGCR notification number and serial no at the item level while filing the bill of entry at any port of import. 

End-to-end automation relating to IGCR compliance 

CBIC has reduced the compliances required under the customs IGCR rules 2017 and introduced end-to-end automation of the procedure involved.

• All the intimations for claiming such exemptions can be submitted electronically through a common portal.
• The various forms in which details need to be submitted electronically have also been standardized and notified.
• The transaction-based permission and intimation which were a part of the erstwhile procedure have now been done away with.
• Instead of a quarterly return, for effective monitoring of the use of goods for the intended purposes, a monthly statement has been introduced. this statement shall also be submitted by the importer.
• Accepting the demand of the trade, a specific provision has been introduced clarifying the procedure for allowing imported goods for inter-unit transfer.
• To further ease the procedures, an option for voluntary payment through the common portal is being enabled shortly.

Reporting compliance for the IGCR goods 

The importer needs to file the monthly return of the utilization of the goods imported under the IGCR rules These returns shall be filed following the procedure –

Importers must submit a monthly statement by the 10 of the following month, using the form IGCR-3 on the common portal.

Importers are required to maintain accounts including separate accounts for inter-unit transfers of IGCR goods. these accounts should be presented to the deputy commissioner or assistant commissioner of customs upon request.

Job workers must maintain accounts which should be presented to the customs officer as and when required.

Non-compliance 

An importer or the job worker who contravenes the provision of these rules shall be liable to a penalty as prescribed.

In addition to any other action taken under the Customs Act 1962 for recovery of duties.

Conclusion 

IGCR is the responsibility of the CBIC. These guidelines are critical in facilitating importers’ ability to seek duty exemptions for specific goods. The streamlined process, facilitated through the ICEGATE portal, necessitates prior notice, continuity bond submission, and comprehensive documentation in the bill of entry.

Importers must ensure that goods are adequately utilized within the designated timeline to prevent penalties, underscoring the criticality of compliance within this framework. As these regulations continue to influence the import landscape, adherence to the prescribed procedures remains necessary to ensure effective utilization and management of goods under the IGCR regime.