The Central Board of Indirect Taxes and Customs ( CBIC ) has issued detailed clarifications regarding the applicability of concessional duty under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2022 (IGCR Rules).
The board received representations 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 through this circular.
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The Stakeholders sought clarity on whether the IGCR benefit can be availed for warehoused goods used in manufacturing while simultaneously availing duty deferment under the MOOWR scheme, especially for goods cleared to the Domestic Tariff Area (DTA), Special Economic Zones (SEZs), or other MOOWR units.
In this regard, this aspect has already been clarified under Question 17 of FAQ 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.”
It reiterated the position in Question 17 of the FAQs on MOOWR and the clarification states that units operating under Section 65 of the Customs Act can simultaneously avail benefits under the IGCR Rules and MOOWR Scheme, provided the respective schemes allow such benefits. Importers must ensure compliance with all additional conditions prescribed under the concessional notification, IGCR Rules, and MOOWR stipulations, including obeying to specified timelines.
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The queries were also raised about the eligibility for IGCR benefits when MOOWR units import specific goods for manufacturing and subsequently supply value-added products to manufacturers of cellular mobile phones. These doubts primarily concerned Notification No. 57/2017-Customs dated June 30, 2017, which specifies that certain goods should be “for use in the manufacture of cellular mobile phones.”
CBIC clarified that the term “for use in the manufacture of cellular mobile phones” signifies that the components must be used in the production process of mobile phones but does not restrict imports to only manufacturers of cellular mobile phones.
Intermediate goods manufacturers undertaking value addition or partial manufacturing for onward supply to the final manufacturers of cellular mobile phones can avail the concessional duty under the IGCR Rules, provided all stipulated conditions are met.
The board also clarified that Instruction 16/2024-Customs dated June 25, 2024, specifies the procedure for MOOWR units to import goods and transfer value-added products to other units. Adequate documentation and periodical accountal are mandatory.
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