Skip to content

CMA Final · Indirect Tax Laws and Practice

Customs Concessional Rate of Duty Import Rules, 2017

The Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 let an importer pay reduced duty under a notification that refers to the Rules, if the importer follows the prescribed procedure, keeps records, and uses the goods for the stated purpose. Miss a condition and the duty forgone is recoverable with interest.

What this chapter covers

This chapter deals with imports where a customs notification gives a lower rate of duty, or an exemption, on condition that the goods are used for a specific purpose, such as making other goods in a factory. The notification gives the benefit. The Rules say how you claim it and what you must do afterwards.

The chapter has a clear flow: who the importer is and what the key terms mean, the steps at the time of import, the records and certificates you keep after import, and what happens if you fail a condition. The Rules text is short, so questions test whether you can apply it to a case.

It links to the rest of Paper 19 in three ways. It sits on top of the levy, valuation and classification chapters, because the concessional rate applies to a duty already computed. It connects to the recovery and interest provisions of the Customs Act. It also connects to the Act's rules on rate of duty, such as Section 19 on sets of articles and Section 28AAA on instruments obtained by collusion, wilful mis-statement or suppression of facts.

The chapter is short and has a fixed logic of condition, procedure, record and consequence, so it suits both MCQs and a case-based written answer. Examiners can build a scenario in which an importer misses one step, and you must say whether the benefit is lost and what is payable. If you learn the sequence and the consequences well, these marks are easy to secure. The related Customs Act provisions also give you extra material for 2-mark MCQs.

Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017: topics in the order to study them

  1. 1Concessional Duty Rules: Scope and DefinitionsYou need to know when the Rules apply and what the terms mean before you can read any procedure.
  2. 2Procedure for Availing Concessional Rate of DutyThis is the core of the chapter: the steps the importer takes at and around the time of import.
  3. 3Maintenance of Records, Certificates and ComplianceIt follows the procedure because it covers what the importer must prove and keep after the goods are cleared.
  4. 4Non-Compliance, Duty Recovery and InterestConsequences make sense only once you know the conditions that can be breached.
  5. 5Related Customs Act Provisions on Rate of DutyStudy this last, as it connects the Rules to Sections 19 and 28AAA and reinforces the recovery logic.

How to prepare Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017

Treat this chapter as a checklist with consequences. Learn it as a sequence, then test it on short cases.

  1. Read the Rules text once, start to finish, and note the definitions and the notification link. Check the exact time limits and forms in the current text, because you must not guess them.
  2. Write the importer's journey on one page: before import, at import, after import, on default. Put each Rule condition under the right stage.
  3. List every record and certificate, who issues or receives it, and what it proves. Revise this list daily.
  4. For non-compliance, write the trigger, what is payable (duty forgone plus interest) and from which date. Practise with small numerical examples.
  5. Read Sections 19 and 28AAA of the Customs Act carefully and learn their conditions in plain words.
  6. Solve past MCQs and case scenarios. In each answer, state the condition, whether it was met, and the result.
  7. In the last week, revise only your one-page journey and checklist.

Common mistakes in Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017

  • Assuming the concessional rate is automatic once the notification exists.

    Fix: Always check each condition and procedural step before giving the answer.

  • Mixing up the order of steps or skipping a procedural step in a case answer.

    Fix: Revise the importer's journey in order: before import, at import, after import, on default.

  • Stating time limits or forms from memory.

    Fix: Verify every limit and form against the Rules text, and write only what you are sure of.

  • Writing that only duty is recoverable on non-compliance.

    Fix: State both: the duty forgone and the interest, along with the date from which it runs.

  • Applying the highest rate to every article in a set under Section 19.

    Fix: Remember that the highest rate applies to articles liable by value at different rates, and that quantity-based articles keep their own duty.

  • Confusing Section 28AAA recovery with a Section 28 demand.

    Fix: Remember that Section 28AAA concerns instruments obtained by collusion, wilful mis-statement or suppression, and that no order under it is passed once a Section 28 order has determined the duty.

Last-day revision: Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017

  • The Rules apply only where a notification gives the concessional rate and refers to them.
  • The benefit depends on conditions, and the importer must meet them in order.
  • Follow the procedure at the time of import exactly as the Rules prescribe.
  • Keep the records and certificates the Rules require, and be ready to show them to the officer.
  • Use the goods only for the purpose stated in the notification.
  • If a condition is breached, the duty forgone becomes payable with interest.
  • Section 19: for a set of articles, articles liable to duty by quantity are charged by quantity.
  • Section 19: articles liable by value at different rates are charged at the highest of those rates.
  • Section 19: accessories and spare parts that meet the conditions in the rules take the same rate as the main article.
  • Section 28AAA: where an instrument was obtained by collusion, wilful mis-statement or suppression of facts, duty on its utilisation is recovered from the person to whom it was issued.
  • Section 28AAA: the show cause notice allows thirty days to reply, and repayment is due within thirty days of the order.
  • Section 28AAA does not apply where an order determining the duty has already been passed under Section 28.

Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 practice questions

Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017: frequently asked questions

What is the main idea of the concessional duty import rules?

They set the procedure and conditions for claiming a lower rate of duty under a notification that refers to them. The importer must follow the steps, keep records and use the goods as intended. Otherwise the benefit can be withdrawn.

What happens if the importer does not meet a condition?

The duty that was forgone becomes payable, along with interest. Learn the trigger and the date from which interest runs from the Rules text, and write both in your answer.

Is Section 19 of the Customs Act part of this chapter?

It is listed as a related provision on rate of duty. It decides the duty on a set of articles: quantity-based articles by quantity, and value-based articles at the same rate or at the highest of the different rates.

What is the cognizable offence limit under Section 104?

Under Section 104(4), offences relating to prohibited goods, or evasion or attempted evasion of duty above fifty lakh rupees, are cognizable. Under Section 104(6), certain Section 135 offences are non-bailable, including evasion above fifty lakh rupees. Other offences are non-cognizable and bailable.