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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