[Opinion] Aiming for trade facilitation via automation of compliances for IGCR

The Customs (Import of Goods at Concessional Rate of Duty-IGCR) Rules provide for procedural safeguards to ensure that goods imported at a concessional rate of duty, subject to an end-use condition, are used for the specified purpose. These rules are to be mandatorily complied with to avail the benefit of exemptions provided under various notifications. Industry players are willing to avail such benefit under the exemption notification, which is subject to compliance of IGCR rules. With an objective to attain a self-reliant and ‘Atmanirbhar Bharat’ and to boost domestic manufacturing, the Government of India has been taking various measures towards ‘trade facilitation’ and for ease of doing business. These measures will also help in realizing the goal of making India a globally competitive market. In Union Budget 2022, the government announced that IGCR compliances will be simplified and automated through a common portal from March 2022. The measures taken by the government under existing rules have broadly elaborated as under:

Changes effective from March 2022

Compliance through the portal

CBIC has taken significant steps in automating the compliances by providing various services through the online platform and by making several amendments to reduce the compliance burden of assessee(s). In light of the same, the procedures for Customs (IGCR) were simplified and made paperless and contactless with end-to-end automation. The following facilities were made available to importers from March 2022:

• • One-time prior intimation on common portal to avail benefit under IGCR (The individual transaction-based permissions and intimations are all done away with thereby reducing manual intervention)
  • Separate unique IGCR Identification Number (IIN) provided to the assessee which is required to be mentioned on bills of entry while availing the benefit under IGCR. All details in relation to the said IIN would be visible to jurisdictional Customs authorities through common portal
  • Furnishing the continuity bond/surety on common portal which can be topped up periodically
  • Maintaining all records on common portal on import of goods/sending goods for job work/inter unit transfer/re-export of goods
  • For effective monitoring of use of goods for intended purpose, a monthly statement has been introduced (earlier the importer needed to undertake quarterly compliance)

Despite the above, the online portal is still not able to help companies undertake IGCR compliances in an automated manner due to the following key issues:

– In case of any incomplete data transmission on the IGCR common portal, the importer is not able to correct/amend the said information
– The duty forgone details are also incorrectly mapped
– Mapping of consumption data does not yet consider opening quantity of past imports
– Jurisdictional authorities still insist on manual submissions

The government needs to proactively address the challenges/issues faced by industries to smoothen the process for online filing of compliances.

Inter unit transfer of goods

The government included a specific provision to allow inter unit transfer of goods based on the representation made by various industries and trade associations.

Depreciation benefit that will be given on sale/disposal of capital goods imported under the IGCR Rules

An incentive provided to the importer to use capital goods and to clear the same in the domestic market at a depreciated value. The said change was not available before February 2021.

In addition to the above, the new IGCR Rules 2022 was notified vide Notification no. 74/2022-Customs (non-tariff) dated 09 September 2022, wherein some changes have been made to address long pending demands of trade and industry.

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