IMPORT AT CONCESSIONAL RATE OF DUTY – AIM OF AMENDMENT NOT ACHIEVED

IMPORT AT CONCESSIONAL RATE OF DUTY – AIM OF AMENDMENT NOT ACHIEVED

An article by:-
CA. Pradeep Jain
CA. Preeti Parihar
CA. Vaibhav Bothra

Introduction
New Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2016 have come into force w.e.f. 1.4.2016. The old rules were superseded with these rules with an aim to simplify the procedural formalities. As of now, three months have passed since the implementation of new rules, but the target of “procedural simplification” has not been achieved. This article is an insight about the aims of new rules and current status of the said aims.

Comparision of new and old rules
A comparision of the changes made by new rules and their rationale is discussed as follows:-
1.     In the old rules, there was requirement of taking the new registration from AC/DC of Central Excise if the benefit of these rules is to be availed. However, the new rules omit the requirement of separate registration if the manufacturer is already registered with AC/DC of Central Excise which is a big relaxation given to the importer manufacturers.
2.     In the old rules the intimation of import was countersigned by the AC/DC of Central Excise which was to be submitted to the AC/DC of Customs. However, in the new rules, the import intimation is to be filed to AC/DC of Central excise in duplicate who will forward one copy to the AC/DC of customs at the port of importation.
3.     The new rules reduces the time limit for re-export of the unutilised or defective imported goods from 6 months to 3 months
4.     The new rules specify that the defective or unutilized imported goods may be cleared on payment of differential import duty along with interest at specified rates.
5.     The new rules provide that the AC/DC of Central Excise may require the importer to furnish security also which was not provided in the old rules.
Out of the above stated amendments, the second one, i.e. the condition pertaining to import intimation is the crucial one and amendment done in its procedure does not give relaxation to the importers.

Intimation of import – procedural simplification
Every time the import is done under the provisions of these rules, an intimation of import is to be filed to AC/DC of Central Excise. This intimation is countersigned by him and this countersigned copy is to be forwarded by the importer to AC/DC of Customs at the time of import. It is on the basis of this countersigned copy that the benefit of these rules read with respective exemption notification is allowed. As per the new rules, the importer is not required to forward the countersigned copy to customs department. The importer’s work ends with submitting the intimation of import in duplicate to the Excise Department. It is the Excise department which is supposed to send the copy signed by its AC/DC to the AC/DC of customs department. In other words, the movement of intimation has been made inter-departmental transfer by virtue of newly substituted rules.

Aim of amendment fails here
Government has brought the new rules to simplify the procedure of filing the import intimation. However, the practical situation is still the same. The importers are still forced to take away the countersigned copy of intimation and file the same to custom department. The excise department is not showing any interest in sending the intimation to customs department. Initially when the new rules were implemented, the importers were relaxed that they need not bother about the countersigned copy of import intimation. However, at the time of import, they were harassed on knowing that the procedure laid down under new rules is not being followed. Ultimately, the importers themselves had to arrange for the countersigned copy of the import intimation from the excise department and it was then submitted to the customs department. Thus, due to non-co-operation of both the departments, the importers are forced to follow the old practice and procedure laid down in the old rules despite fact that the new rules does not speak about the same. Due to this, it seems that the substitution of old rules with new ones has become a futile exercise due to non co-operation of relevant departmental officers.

While parting
It is quite clear that the intention of the government has been to ease the procedure and paper work to be followed by the importer. Although the new rules have come in force but in practical life, it seems that ease of doing business is still a long fetched dream. This is clearly visible by the existing situation in the governmental departments. The government spends a large amount on research and makes suitable amendments in order to simplify the procedures. However, the entire exercise of government and expectations of trade are bounced back due to negligence and non-co operation of field formations. So far as the new rules in issue are concerned, the government should come up with guidelines or clarification strictly directing the relevant officers of excise and customs department to follow the provisions and procedure laid down by the new rules.

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IMPORT AT CONCESSIONAL RATE OF DUTY – AIM OF AMENDMENT NOT ACHIEVED

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