In India's import-export sector, effective use of customs duty benefits is crucial in cutting costs and enhancing competitiveness. One such significant scheme which assists manufacturers and importers in deriving customs duty exemptions or concessions on imported items is the IGCR mechanism.
Understanding the IGCR Scheme
The IGCR full form is Import of Goods at Concessional Rate of Duty Rules. The rules were originally enacted in 2017 and are administered by the Central Board of Indirect Taxes and Customs (CBIC) under the Customs Act, 1962.
The main objective of IGCR is to enable importers, producers, and service providers to import products at a concessional rate of customs duty, subject to such imported goods being used for defined purposes including:
- Production of goods;
- Supplying output services; or
- Creation of capital goods.
Essentially, IGCR in customs is aimed at enabling importers to lower their customs duty burden by pledging to utilize imported inputs or capital goods for predetermined end-use in India.
Objective and Scope of IGCR
The IGCR regulations are formulated to encourage "Make in India" through facilitation of industries accessing raw materials and capital goods at reduced duty levels. This facilitates lower cost of production and competitiveness of local manufacturing.
Major goals of IGCR are:
1. Facilitating Ease of Doing Business: Streamlining the process of customs duty concession online and through automation.
2. Cost Savings: Enabling importers to import goods without paying full customs duty at the initial stage.
3. Transparency: Facilitating end-use verification based on self-declaration and reporting.
4. Digital Processing: Rollout of the IGCR module in ICEGATE for ease of registration, monitoring, and reporting.
Under IGCR regulations, importers have to make a single declaration and adopt compliance steps to take these advantages.
Who Can Take Advantage of IGCR?
The scheme of IGCR can be availed by:
- Manufacturers who utilize imported items as inputs for production.
- Service providers utilizing imported items for provision of services.
- Capital goods importers for manufacturing or service provision.
In effect, any business enterprise importing goods for consumption in India (and not for trading or resale in the same condition) can make an application under IGCR in customs.
Eligibility and Conditions under IGCR
For availing of benefits, the following conditions must be ensured by the importer:
1. Registration under IGCR: The importer should register in the IGCR module on ICEGATE prior to availing benefit.
2. Utilization of Imported Commodities: The commodities must be utilized for the stated end-use purpose within the prescribed time limit.
3. Preservation of Records: The importer is required to keep proper records of import receipt, utilization, and balance of imported commodities.
4. Familiarity with IGCR Rules: The importer has to make required declarations, returns, and undertakings in accordance with prescribed time limits.
Non-compliance with these rules of IGCR may result in demand for payment of duty with interest and imposition of penalties.
IGCR Process Overview
The IGCR registration process consists of various stages—from online registration to use and reporting. The following is a step-by-step overview.
1. Registration in the IGCR Module
First, the importer has to register in the IGCR module on the ICEGATE portal (https://www.icegate.gov.in). This registration is required to enjoy the concession under the scheme. It consists of furnishing basic entity details, GSTIN, IEC, and address of manufacturing premises.
2. Application for One-Time Declaration
Following registration, the importer files an "One-Time Declaration" (OTD) via the IGCR module. The declaration cites the nature of the goods to be imported, usage purpose, and the manufacturing unit details.
After verification, customs provide an acknowledgment, which enables the importer to commence import of goods at concessional rates.
3. Import of Goods
After the importer's details are validated, the importer can begin importing products through the IGCR module. Every Bill of Entry submitted must reference the IGCR reference number, which connects the import to the registered purpose.
4. Notification to Jurisdictional Customs Officer
The importer has to notify the jurisdictional customs officer within a stipulated time about the goods imported and their destination use. This provides traceability and adherence.
5. Utilization and Record Keeping
The importer shall utilize the goods as reported and keep usage records such as input-output ratio, production information, and inventories balances.
6. Quarterly Returns and Reporting
The importer shall submit quarterly returns via the IGCR module, certifying how the goods were used. These are essential for post-clearance audit.
7. Finalization and Closure
After the notified purpose is met, the importer can enter final closure notification using the IGCR module, closing the compliance loop.
Advantages of IGCR for Importers
The IGCR system brings about various direct and indirect advantages for eligible importers and producers:
1. Savings in Customs Duty
With the benefit of concessional duty rates, companies are able to save considerably on import expenses, which helps to boost profit margins directly.
2. Enhanced Cash Flow
Because the importer is not required to pay the full customs duty in advance, it adds liquidity and improves working capital efficiency.
3. Streamlined Digital Compliance
With the IGCR module, the procedure is online — from registration to reporting — without manual intervention and enhanced transparency.
4. Manufacturing Competitiveness Boost
Reduced input costs improve the competitiveness of Indian manufactured products in the domestic and export markets.
5. Flexibility and Convenience
After registering, the importer is free to use the IGCR module for subsequent consignments without requiring repetitive approvals.
Documents Required to Obtain IGCR Certificate
In order to Obtain IGCR certificate, the following important documents are usually required:
1. IEC Certificate (Import Export Code)
2. GST Registration Certificate
3. Proof of Factory/Unit Address
4. Goods to be imported details
5. End-Use Declaration and Process Flow
6. Details of Authorized Signatory
These documents are filed in the IGCR module at the time of registration. Once verified, customs issue the approval for importations at concessional duty.
How to Apply for IGCR
You might be wondering how to apply for IGCR. Here is the brief process:
1. Get registered on the ICEGATE portal and activate your user account.
2. Login to the IGCR module and file your One-Time Declaration.
3. Upload supporting documents and details about the goods.
4. Wait for verification and acknowledgement by customs.
5. Start imports under concessional rates as soon as approval is obtained.
6. Keep utilization records and file quarterly returns.
This electronic system has replaced the older manual processes, streamlining compliance into a quicker, more efficient process.
Recent Changes in IGCR Rules
The IGCR rules have seen some changes to make processes simpler. Some key changes are:
- Integration with ICEGATE: The entire filing, approval, and return process is now digital.
- Introduction of QR Codes and Acknowledgements: The traceability and verification have been enhanced.
- Self-Declaration Based Approach: Less reliance on physical checks and manual filing.
- Online Surveillance: Customs officials can now electronically track the whole import-to-utilization process.
These reforms demonstrate the government's plan to make IGCR in customs clearer and easier to use.
Common Problems Experienced by Importers
IGCR has great advantages, but numerous importers experience practical difficulties like:
- Complex knowledge of eligibility requirements
- Struggling with using the IGCR module
- Getting confused in associating imported goods with output products
- Delay in acknowledgment or approval due to documentation gaps
- Lack of internal record maintenance or timely reporting
To overcome these issues, it’s advisable to seek expert assistance for compliance, documentation, and end-use declarations.
How SKMC Global Can Help
SKMC Global is a professional consulting firm specializing in customs, import-export compliance, and industrial registrations. SKMC Global experts assist clients with the IGCR registration process with error-free documentation and timely approvals.
We help you:
- Verify eligibility and end-use suitability.
- File and submit One-Time Declarations through the IGCR module.
- Keep on hand compliance records and quarterly returns.
- Process correspondence with customs officials.
- Help you through the process of Getting IGCR certificate and renewals.
With our assistance, your enterprise can effortlessly utilize the advantages of the IGCR scheme without compromising on any regulatory compliance.
Conclusion
The Import of Goods at Concessional Rate of Duty (IGCR) scheme is a strategic advantage for manufacturers and service providers to lower import costs and optimize operational efficiency. By utilizing the IGCR module strategically and following the IGCR rules, companies can import inputs or capital goods legally at a lower rate of customs duties and gain competitiveness.
It is also important to know how to apply for IGCR and adhere to the IGCR registration process strictly in order to get maximum benefits. Strict compliance does not just guarantee cost benefits, but also hassle-free audits and ongoing eligibility.
If your company wants to Get IGCR certificate or requires professional help with IGCR in customs, SKMC Global can assist you at every step — from registration to closing — with ease and accuracy.