The Central Board of Indirect Taxes and Customs (CBIC) has notified certain amendments in the rules for importing raw materials and finished goods. These changes are expected to facilitate outsourcing of manufacturing operations within India, allow inter-company transfer of raw materials and ensure ease of manufacturing.
In a circular dated May 17, 2021, the CBIC notified the amendments related to job-work which were announced in Budget 2021 and made effective from February 02, 2021.
As per the new norms, all importers and manufacturers are now allowed to get finished goods (completely outsourced) and intermediate goods (partially outsourced) manufactured on a job-work basis.
Further, importers will now have an option to import capital goods for the specified purpose at a concessional rate and clear the same after use on payment of applicable customs duties along with interest on the depreciated value.
In addition, the government has also modified the approval system to a one-time intimation which needs to be sent by the importer, reducing the compliance-related paperwork.
According to the India Cellular & Electronics Association (ICEA), the new rules will ensure that job work to vendors by the industry majors can now be performed seamlessly after the clarifications.
