Ad hoc Exemption Order No. 4/2021-Customs read with FAQs issued by CBIC dated 7th May, 2021

Earlier CBIC issued Ad hoc Exemption Order No. 4/2021-Customs dated 03-05-2021 to providing the relief/exemption from IGST on imports of specified COVID-19 relief material.

Certain procedural clarification was untouched in the said order. For answers all such queries of stakeholders such as a procedure for certification of the statement containing details of such imported goods distributed free of cost, the requirement of certificate for each consignment or for relief agency, the format of certificate etc., CBIC come up with FAQs with respect to ad hoc exemption granted from IGST on imports of specified COVID-19 relief material.

Ad hoc Exemption Order No. 4/2021-Customs dated 03-05-2021    

G.S.R. (E)…- In exercise of the powers conferred by sub-section (2) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, under exceptional circumstances prevailing due to the COVID-19 pandemic, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description as specified in the notifications listed in the Appendix below, falling within the Chapter, heading, subheading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as specified in the said notifications, when imported into India, from the whole of the integrated tax leviable thereon under sub-section (7) of section 3 of the said Customs Tariff Act, read with section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), subject to the conditions specified in the Annexure to this exemption order.

This exemption order shall remain in force up to and inclusive of the 30th day of June, 2021 and shall also apply to goods that are pending for clearance on the date of issue of this order.

Appendix

S. No. Notification
1 Notification No. 27/2021-Customs, dated the 20th April, 2021 [G.S.R. 284(E), dated the 20th April, 2021]
2 Notification No. 28/2021-Customs, dated the 24th April, 2021 [G.S.R. 286(E), dated the 24th April, 2021]

Annexure

Condition No.

Condition

1 The said goods are imported free of cost for the purpose of Covid relief by a State Government or, any entity, relief agency or statutory body, authorised in this regard by any State Government.
2 The said goods are received from abroad for free distribution in India for the purpose of Covid relief.
3 Before the clearance of the goods, the importer produces to the Deputy or Assistant Commissioner of Customs, as the case may be, a certificate from a nodal authority, appointed by a State Government, that the imported goods are meant for free distribution for Covid relief, by the State Government, or the entity, relief agency or statutory body, as specified in such certificate.
4 The importer produces before the Deputy or Assistant Commissioner of Customs, as the case may be, at the port of import within a period of six months from the date of importation, or within such extended period not exceeding nine months from the said date as that Deputy or Assistant Commissioner of Customs may allow, a statement containing details of goods distributed free of cost duly certified by the said nodal authority of the State Government.

FREQUENTLY ASKED QUESTIONS

S. No. FAQ

Clarification

1 Whether   exemption from the IGST under the said Order is available in case the importer buys the goods from abroad, but the same is meant    for    free distribution for COVD relief in India? 1.1. Condition No. 1 of Annexure to the said Order states that, the said goods are imported free of cost for the purpose of Covid relief by a State Government or, any entity, relief agency or statutory body, authorised in this regard by any State Government. Thus, it is clear that the ad-hoc exemption order applies only where the importer gets goods free of cost for free distribution. Other instances are not covered by the exemption order.

1.2. In this context, a number of references have been received informing that many entities, including  Corporates,  intend  to  source COVID  relief  material  from  abroad  and distribute  it  freely,  availing  the  IGST exemption under the said Order.

1.3. It  may  be  mentioned  that in  case any corporate buys it and even gives it for free, such  exemption will not  be available. To reiterate, it is available when said goods are imported free  of  cost  for  the  purpose  of Covid relief by a State Government or, any entity, relief  agency  or  statutory  body, authorised  in  this  regard  by  any  State

2 The  imports  may  be imported   at   place within  jurisdiction  of State A, and goods may be for free distribution in State A as well as B.

In such a case,  which State  nodal  authority, A  or  B,  shall  be required   to   issue authorization and certify    the    free distribution  of  said

Any ‘relief agency’ authorised by a State can make free distribution of goods so imported any where  in  India.  Exemption order only envisages that relief agency should have been authorised  by  a State and  should  have obtained a certificate to this effect. So in the instant case either of the States A or B may authorise the agency and issue the certificate for  compliance  of  Condition  No.  3 of the Annexure to the said Order.
3 Is  there  a  specified format   for   issuing certificate, recommending exemption  to  a  relief agency? A format for the said authorization for import is placed on CBIC’s website, under Customs-Instructions-Instruction 9/2021-Customs dated  3rd May,  2021.

This said format is for facilitation purpose.

Certificate in any format containing information as mentioned in format at the above link shall be accepted by Customs.

4 What will be the procedure for certification of the statement  containing details    of    such imported goods distributed free of cost, if  distributed  within the  state  whose  nodal authority  authorising the  importing  entity/ relief  agency,  and  if distributed  in  other states. Condition No. 4 of the Annexure to the said Order  requires  that  a  statement  containing details of goods distributed free of cost, duly certified by the said nodal authority of the State Government, is to be produced by the importer before the specified Customs officer at the port of importation.

The certification of statement shall be  done  by  the  nodal  authority  that authorises  the  relief  agency  and  issues certificate  to  relief  agency  recommending exemption under the adhoc order.

There is no prescribed  procedure  for  certification  of statement  and  the States/ State  nodal authorities are at liberty to devise their own suitable  mechanism  as  deemed-fit,  for certification of statement.

5 The  nodal  authority will issue the certificate to the entity who will submit the same before the concerned customs authority at the time of clearance  of  goods.

Is this understanding, correct?

Yes, Condition No. 3 of Annexure to said Order may be referred to.

As mentioned therein, the State  nodal  authority  will  authorize  the importing entity, and the importer will produce the said authorization before Customs at time of clearance for availing the exemption.

6 Is  the  certificate  to  be issued import consignment wise or a certificate  could  be issued covering multiple imports by a relief agency? Although, a certificate  is  required  to  be produced  by  an  importer to  Customs  at  the  time  of  clearance  of  each  consignment,  a separate,  consignment-wise  certificate  is  not necessary.

A certificate issued to a relief agency may cover goods imported  under  multiple consignments.

The  certificate  should specify port-wise anticipated import by relief agency, in the format as mentioned at S. No. 3 above.

At the end, CBIC also provide a disclaimer that these FAQ’s is being issued for the purpose of understanding of the stakeholders and does not have the force of law, and in respect of dispute, if any, the legal text of the exemption said order shall only be relevant.

Thus there might be the scope of further clarification as the time comes in such direction.

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