Clarification on Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017

Circular No.48/2017-Customs

Government of India
Ministry of Finance
Department of Revenue
(Central Board Excise & Customs)

Room 227 B , North Block

New Delhi, dated 8th December 2017


All Principal Chief Commissioner /Chief Commmissioner of Cutsoms/Custom (Preventive)
All Principal Chief Commissioner/Chief Commissioner of Central Tax
All Principal Commissioner/ Chief Commmissioner of Cutsoms/Customs(Preventive)
All Principal Commissioner/ Commissioner of Central Tax



 Subject: Clarification on Customs(Import of Goods at Concessional Rate of Duty)Rules, 2017-reg.

Kind reference is drawn to Notification No. 68/2017-Customs(N.T.) dated 30.6.2017 notifying  Customs(Import of Goods at Concessional Rate of Duty)Rules, 2017.

  1. As per sub-rule (2) of rule 5 of Customs(Import of Goods at Concessional Rate of Duty)Rules, 2017 an importer in order to avail exemption provided vide notification issued under subsection (1) of Section 25 of Customs Act is required to submit such surety or security as deemed appropriate by the Deputy Commissioner of Customs or Assisstant Commissioner of Customs having jurisdiction over the premises where the imported goods shall be put to use for manfacture of goods or rendering output of services.
  2. CBEC has received various references stating that the provision of submission of surety or security in the rules , is posing a major challenge for domestic industry particularly electronic hardware manufacturers as submission of surety increases the transaction cost hampering their efforts to optimise the manufacturing capacity.
  1. In thius regard, it is worthwhile to mention that the option to furnish surety ort security almong with the Bond is gioven, in order to facilitae manufactures and service providers keeping in view the different buisness environments in which the entreprenuers function and also to protect the interests of revenue. However, keeping in view the objective of the Government to further simplify the business procedures and to reduce the burden of compliance cost, CBEC has decided to further ease the norms for taking security/surety almong with the Bond.
  2. In view of the above ,Bank Guarantee security , surety shall be taken as per the following norms for the purpose of extending the benfit under the Customs (Import of Goods at Concessional Rate of Duty)Rules,2017.
Category of Importer Quantum of Bank Guarantee/cash security and requirement of Surety
a) All importer (s) who are either a department of Central Government or a State Government or a Union Territory or a Public Sector Undertaking or an autonomous institute under the said governments. Bank Guarantee/Cash Security -Nil

Surety-Not required.

b) All importers who are Authorized Economic Operators.  
c) All importers who are manufacturers or service providers registered under GST and have been filing prescribed GST returns without fail and whose turnover in the preceding year is above Rs.1 crore. Importers shall give surety for the amount of duty foregone. However, where the importer is not able to provide surety , a Bank Guarantee /Cash Security equivalent to not more than 5% of duty foregone shall be furnished.
d) Importers , not covered under (a),(b)&(c) above. Bank Guarantee/Cash Security -Not more than 25% of the duty foregone amount.

Explanation:-Duty Foregone would be calculated by reckoning the duty applicable if the importer were not to follow the procedure prescribed in the Customs (Import of Goods at Concessional Rate of Duty)Rules,2017.

  1. The upper limit of Bank Guarantee /Cash Security to the extent of 5% and 25% respectively has been fixed unless the Deputy Commissioner or the Assistant Commissioner has reasons to demand a higher quantum of Bank guarantee /cash security ,in which case the matter shall be referred to the jurisdictional Commissioner who may order for higher quantum of Bank Guarantee or cash security, subject to limit of 100% of the total duty foregone ,after recording the reasons thereof in writing.
  2. In order to avail above exemption/relaxation from furnishing Bank Guarantee /Cash security or surety ,prosecution should not have been initiated or launched against the importer under ,any Act administered by the Central Board of Excise &Customs or State Goods & Service Tax Act or Integrated Goods & Service Tax Act or Union Territory Goods & Service Tax Act during the previous three financial years.
  1. Where an importer so requests, the bank guarantee/cash security may be taken consignment -wise to obviate the financial burden. Further , all bank guarantee(s) should have self-renewal clause.
  2. All chief Commissioners are requested to issue suitable standing order, for guidance of the concerned officers. Difficulty, if any, in implementation of the above directions may be brought to the notice of the Board.
  3. Hindi version will follow.

Yours faithfully

(Zubair Riaz)


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