Clarification relating to import of Gifts - Customs - PUBLIC NOTICE No. 02/2020

OFFICE OF THE Pr. COMMISSIONER OF CUSTOMS (ACC-IMPORT) NEW CUSTOMS HOUSE NEAR IGI AIRPORT NEW DELHI-110037 C. No. VIII(12)Import/Tec./PN/06/2020/2035-2048 Dated: 31.01.2020 PUBLIC NOTICE No. 02/2020 Sub: Clarification relating to import of Gifts -reg. Attention of all Customs Brokers, Importers, all ICEGATE community partners, other stake holders and members of the Trade is invited to the Notification No. 35/2015-2020 dated 12.12.2019 (Annexure-I), issued by the Directorate General of Foreign Trade, Department of Commerce, Ministry of Commerce and Industry. 2. The said DGFT notification reads as follows: import of goods, including those purchased from e-commerce portals, through post or courier, where customs clearance is sought as gifts, is prohibited except for life saving drugs/ medicines and Rakhi (but not gifts related to Rakhi). Explanation : 1. Rakhi (but not gifts related to Rakhi) will be covered under Section 25(6) of Customs Act, 1962 that reads ...no duty shall be collected if the amount of duty leviable is equal to or less than ₹ 100/-. 2. Import of goods as gifts with payment of full applicable duties is allowed. 3. DGFT notification effectively means that if goods imported through courier or post (be it e-commerce imports or otherwise) as gifts seek the exemption available for imports of bonafide gifts upto a c.i.f. value of ₹ 5000/- vide S. No. 608A of Notification No. 50/2017-Customs dated 30th June 2017, then the imports will be prohibited. However, the goods imported as gifts can be allowed import free (i.e. without prohibition) on payment of full applicable duties. Since the goods imported as gifts would be personal imports, the full applicable duties will be as follows:- (a) Basic Customs Duty at applicable tariff rate as per the First schedule of the Customs Tariff Act for the heading 9804 which is 35% at present. (b) IGST at the rate specified for the heading 9804 (S. No. 227 of Schedule IV in notification No. 1/2017 - Integrated Tax (Rate) dated 28th June 2017) for IGST which is at present 28%. 3.1. However, lifesaving drugs/ medicines can continue to avail exemption available under S. No. 607 A as well as S. No. 608A of notification No. 50/2017- Customs dated 30th June 2017. 4. Section 25(6) of the Customs Act states that, Notwithstanding anything contained in this Act, no duty shall be collected if the amount of duty leviable is equal, to or less than, one hundred rupees . Thus, it goes without saying that if the duty on any goods is less than one hundred rupees, same will not be collected. 5 Further, it is to state that Board has earlier issued Instruction No. 9/2017-Customs dated 5th July, 2017 to clarify the application of clause 3(1) (i) of Foreign Trade (Exemption from application of Rules in certain cases) Order 1993 ('FTO, 1993' for shot) which put a restriction on personal imports above a C.I.F value of ₹ 2000/-. 5.1 The PTO, 1993 has since been amended vide issue of Foreign Trade (Exemption from application of Rules in certain cases) Amendment Order, 2017 and clause 3(1) (i) of the FTC), 1993 now read as under:- 3. Exemption from the application of rules.- (1) Nothing contained in the Rules shall apply to the import of any goods, (i) by any person through the post of otherwise for his personal use subject to compliance of other Laws/ Rules/ Orders/ Regulations in force. 5.2 Further, vide notification No. 16/2015-20 dated 12th July 2017, DGFT has removed the value cap of ₹ 2000/- with respect to personal imports, as well as, fully aligned the chapter notes in ITC(HS) with those enacted under Chapter 98 of the Customs Tariff Act, 1975. 6. In view of the above, the Instruction No. 9/2017 -Customs dated 5th July 2017 issued by CBIC has become obsolete and have been rescinded by CBIC. 7. To curb the undervaluation being done by unscrupulous importer S' officers are advised to strictly follow the provisions of Section 14 of the Customs Act, 1962 read with Customs Valuation (Determination Of Value of Imported Goods) Rules, 2017 for valuation of imports through courier and posts. 8. All trade associations/ members of Customs Brokers Association are requested to take note and publicize the contents of this Public Notice among their members/ constituents. 9. For the departmental officers, this may be treated as Standing Order. 10. Difficulties, if any, may be brought to the notice of Additional Commissioner of Customs (Technical), ACC Imports, New Customs House, New Delhi. [Source: Circular No. 04/2020-Customs dated 21.01.2020] (Nagendra Yadav) Additional Commissioner of Customs (Technical) ACC (Import)