Amendments not to include precious metals
The Central Board of Indirect Taxes and Custom (CBIC) has formalised the system for importing raw material, other than precious metals, to be used for job work under the Customs (Import of Goods at Concessional Rate of Duty) Amendment Rules, 2021. Tax officials say this will benefit especially the Micro, Small and Medium Enterprises (MSME).
The IGCR rules lay down the procedures and manner in which an importer can avail the benefit of a concessional customs duty on import of goods required for domestic production of goods or providing services. One major change that accommodates the needs of trade and industry is that the imported goods have been permitted to be sent out for ‘job work’. The absence of this facility had earlier constrained the industry especially those in the MSME sector which did not have the complete manufacturing capability in-house.
Now, the facility of carrying out job work under the ambit of IGCR has been introduced. The scope of the job work facility has been extended to an importer who is a manufacturer but without complete manufacturing facility. Also, 100 per cent outsourcing for manufacture of goods on job-work basis has been permitted for importers who do not have any manufacturing facility at all. However, sensitive sectors such as gold, articles of jewellery and other precious metals or stones have been excluded from the facility of job work.
Another major incentive now provided is to allow those who import capital goods at a concessional customs duty to clear them in the domestic market on payment of duty and interest, at a depreciated value. This was not allowed earlier, and manufacturers were stuck with the imported capital goods after having used them as they could not be easily re-exported.
According to CBIC, the Amendment Rules have been introduced in view of the demands from the trade and industry and having regard to their changing needs as per prevalent global practices. “The amendments are also an effort towards creating an enabling environment for promoting manufacturing by domestic industry, to make them competitive globally and also self-reliant in furtherance of the goal of Atmanirbhar Bharat,” it said.