Amendment in Import Policy Conditions for IT Hardware

Introduction: The Ministry of Commerce and Industry, under the Directorate General of Foreign Trade (DGFT), has issued Notification No. 38/2023- DGFT on October 19, 2023. This notification introduces amendments to Policy Condition no. 4 of Chapter 84 of Schedule 1, which pertains to the import policy for IT hardware under the Indian Trade Classification (HS), 2022.

Amendments in Import Policy Conditions:

1. Introduction of Additional Conditions:

Under Policy Condition 4 of Chapter 84 of Schedule I of ITC (HS), 2022, the following additional conditions have been introduced:

vii. Import of IT Hardware from Special Economic Zones (SEZ): IT hardware restricted for import, as per Notifications 23/2023 dated 03.08.2023, which is manufactured in Special Economic Zones (SEZ), may be imported into the Domestic Tariff Area (DTA) without the need for an Import Authorization. However, this exemption from Import Authorization applies provided that activities like re-packing, labelling, refurbishing, testing, and calibration within the SEZ are not considered as manufacturing for the purpose of availing this exemption.

viii. Exemption for Private Entities: Private entities importing the aforementioned IT hardware for supply to the Central Government, government agencies, or undertakings owned and controlled by the Central Government for Defence or Security purposes, as well as to State Governments for Security purposes, are exempt from requiring an import authorization. These private entities must, at the time of import, provide Customs Authorities with a valid End User Certificate issued by the relevant government entity.

2. Amendment to Existing Condition:

Policy Condition 4(iv) of Chapter 84 of Schedule-I of ITC(HS) 2022 has been amended. The existing condition, which granted exemption from import licenses for specific purposes, has been revised as follows:

Existing Condition (Before Amendment): Exemption from import license is provided for up to 20 such items per consignment for the purpose of R&D, Testing, Benchmarking, and Evaluation, repair, and re-export, Product Development purposes. Given imports shall be allowed subject to the condition that the imported goods shall be used for the stated purposes only and will not be sold. Further, after the intended purpose, the products would either be destroyed beyond use or re-exported.

Revised Condition (After Amendment): Exemption from import authorization is provided up to 20 items per consignment for R&D, Testing, Benchmarking, and Evaluation, Product Development purposes. Exemption is further provided for import for repair and/or return and/or replacement of IT Hardware sold earlier, as well as re-import of such items repaired abroad on a self-certification basis.

Effect of the Notification: This notification brings significant changes to the import policy for IT hardware. It facilitates the import of IT hardware manufactured in SEZ into the Domestic Tariff Area (DTA) without the need for an Import Authorization. Additionally, it exempts private entities importing IT hardware for Defence or Security purposes on behalf of Central and State Government entities from requiring an import authorization. The amendment also provides flexibility for import of IT hardware for repair, return, replacement, and re-importation of repaired items.

This notification reflects the government’s efforts to streamline and facilitate the import process for IT hardware and to support government security initiatives.

This notification is issued with the approval of the Minister of Commerce & Industry and aims to enhance trade and commerce in the IT hardware sector.

For further details and inquiries, please contact the Directorate General of Foreign Trade via email at [email protected].

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Government of India
Ministry of Commerce and Industry
Department of Commerce
Directorate General of Foreign Trade
Vanijya Bhawan

Notification No. 38/2023- DGFT | Dated: 19^th October 2023

Subject: Amendment in Policy Condition no. 4 of Chapter 84 of schedule 1 (import policy) of ITC (HS), 2022 -reg.

S.O. 4578(E).- In exercise of powers conferred by Section 3 and Section 5 of Foreign Trade (Development & Regulation) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2023, as amended from time to time, and referring to previous Notifications 23/2023 dated 03.08.2023 & Notification 26/2023 dated 04.08.2023, the following changes in Import Policy Conditions are hereby notified:

1. Additional conditions are introduced under Policy condition 4 of Chapter 84 of Schedule I of ITC (HS), 2022 as follows:

vii. IT hardware restricted for Import vide Notifications 23/2023 dated 03.08.2023 which are manufactured in Special Economic Zones (SEZ) may be imported into Domestic Tariff Area (DTA) without an Import Authorization, on payment of applicable duties (if any). Activities such as re-packing, labelling, refurbishing, testing, and calibration alone within the SEZ are not considered as manufacturing for the purpose of availing this exemption from Import Authorization.

viii. Private entities importing the said IT Hardware for supply to —

a. Central Government or agencies, undertakings owned and controlled by the Central Government, for Defence or Security purposes;

b. State Government for Security purposes;

are exempt from requiring an import authorization. However, these private entities at the time of import, must provide to the Customs Authorities, a valid End User Certificate issued by the relevant government entity.

2. Policy Condition 4(iv) of Chapter 84 of Schedule-I of ITC(HS) 2022 is amended as follows

Effect of the Notification: Import of IT Hardware manufactured in SEZ into DTA shall be exempt from an Import Authorisation. Import by private entities on behalf of Central & State Government Entities, for Defence & Security purposes, shall be exempt from an Import Authorisation.

This is issued with the approval of Minister of Commerce & Industry.

(Santosh Kumar Sarangi)
Director General of Foreign Trade &
Ex- officio Addl. Secretary to the Govt. of India
E-mail: [email protected]

(Issued from F.No.01/89/180/39/AM-13/PC-2[A]/E-2261)