DGFT circular: No, the new norms don’t make your tech imports cheaper

Now, with the DGFT raising the limit, all it means is that you can now import goods with the total C.I.F value of up to Rs 50,000 without having to apply for an IEC.

Written by Swapnil Mathur | Updated: August 26, 2016 6:20:29 pm

 

Consumer electronic items, electronic items, customs duty, import duty, customs duty on gadgets, import duty on gadgets, DGFT, Directorate General of Foreign Trade, technology, technology news The takeaway from this is that in case you’ve got a cart full of electronic goodies, do not make the purchase assuming you won’t have to pay an import duty. (Image for representational purpose only) (Source: Amazon)

A circular issued by the Directorate General of Foreign Trade (DGFT) has been making the rounds of the Internet stating that “Consumer electronic items (except hearing aids and lifesaving equipments, apparatus and appliances and parts thereof): Provide that the c.i.f value of goods imported aforesaid at any one time shall not exceed rupees fifty thousand.” Earlier, this limit was a meagre Rs 2000 and if you’re thinking this means you can go on a shopping spree and be exempt from import duty up to Rs 50,000, you’re in for a rude shock.

C.I.F stands for Cost Insurance and Freight and as such is a figure that is the sum total of all three. When trying to import electronic items from abroad, if the total cost of the item, plus insurance and freight was over Rs. 2000, you were required to apply for an import export certificate (IEC) so that your package would not get held up with the Customs officials. Even with the appropriate paperwork (IEC) you would be required to pay an import duty on the product in accordance with the law. Now, with the DGFT raising the limit from Rs 2,000 to Rs 50,000, all it means is that you can now import goods with the total C.I.F value of up to Rs 50,000 without having to apply for an IEC.

Consumer electronic items, electronic items, customs duty, import duty, customs duty on gadgets, import duty on gadgets, DGFT, Directorate General of Foreign Trade, technology, technology news

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Since there was confusion across various forums, we reached out to the DGFT ourselves to get clarity on this new amendment. We were informed that first and foremost, the amendment is only implemented once it has been published in the Gazette of India which is yet to happen. Secondly, the C.I.F limit has no implication on the amount of import duty levied on a product and as such, the two should NOT be confused. The advantage of having a higher C.I.F limit is that now if you need to import let’s say an electronic component for that amazing DIY project you’ve been working on, you can. Earlier, the limit of Rs.2000 made it near impossible to import electronics without running into issues with the customs officials due to lack of paperwork, but that will be a thing of the past once this amendment is put into effect.

The takeaway from this is that in case you’ve got a cart full of electronic goodies, do not make the purchase assuming you won’t have to pay an import duty. The increased CIF limit is only a relief in terms of the fact that now you can import a lot many more types of items without having to worry about getting an Import Export Certificate first.

 

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