The Central Board of Indirect Taxes and Customs (CBIC) last week notified some major changes introduced through the Customs (Import of Goods at Concessional Rate of Duty) Amendment Rules, 2021. These changes are aimed at promoting the domestic manufacturing industry and making it globally competitive. The new measures are expected also to help the Indian MSME sector, which has been going through a challenging time for quite some time now.

One of these welcome measures include in respect of job-work, the scope of which has now been extended to an importer who is a manufacturer but without a complete manufacturing facility. Additionally, for importers who do not have any manufacturing facility at all, 100% outsourcing for manufacture of goods on a job-work basis is allowed now, except in respect of some select sectors. Needless to say, this is a big relief for MSMEs with limited or no manufacturing facility.

In addition, an option has been given to importers to import capital goods for a specified purpose at a concessional rate of duty and after having put such capital goods to use for the said purpose, clear the same at a depreciated value after payment of the differential duty and interest. Earlier, this was not allowed and, as a result manufacturers were stuck with the imported capital goods as they could not be easily re-exported. Also, the procedure for availing the concessional Customs duty under these rules have been eased.

Meanwhile, an industry body has recently called for a substantial economic stimulus package to create effective strides for futuristic economic growth trajectory. No doubt, the second wave of Covid has posed severe challenges to the Indian economy, and a stimulus at this juncture would prove crucial. Additionally, the industry body reiterates the need to lower interest rates for consumers and businesses, lesser compliances for MSMEs and a lower tax regime for the people. These suggestions sound good.

I invite your opinions.