The Central Government has the power to make rules regarding the imports and exports of the country under the Foreign Trade Development and Regulation Act of 1992. Utilising the power under this act the central government drafts the national foreign trade policy and makes changes as and when required. The Department of Commerce under the Ministry of Commerce and Industry issued a recent notification amending the import rules for some specified items under Chapter 4 of the ITC HS 2022. The notification affects the import of computers and other data-processing machines. The import provisions relating to these items are revised and a new policy is prescribed. The importers of these devices including computers, laptops, and other auto-processing machines need to look into the update and act accordingly to avoid any subsequent inconvenience.
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What is the 8471 HSN Code?
The term ITC-HS may seem confusing for those who have not been through the foreign trade provisions before. It stands for Indian Trade Clarification based on a Harmonised System. This system is used to prescribe various import rules and facilitate the customs department in import and export operations. ITC HS Code is an eight-digit number. The first two digits indicate the chapter number to which the item belongs and further digits mark the headings, subheadings and the item number. In 8471 HSN Code, 84 is the chapter number and 71 is the heading under which the relevant items are listed. These codes are divided into two categories- Schedule 1 and Schedule 2. The first schedule provides rules for the import of these items while the second schedule prescribes rules for the export. The HSN Code is also known as the EXIM Code.
New Provisions for the Import of Computer Devices
The amendment introduces a new policy condition to the import policy and further revises the import policy of the items as mentioned under the head 8471 HSN Code. These items include laptops, tablets, personal computers, and small computers. Currently, the document only has three policy conditions while after the amendment a new 4th condition will be added to the same. This newly added policy condition prescribes the following rules-
- The laptops, tablets, computer machines and items as classified under the 8471 HSN Code shall be restricted for import.
- The import of these items shall only be allowed against a valid licence for restricted imports.
- If the import falls under the baggage rules then these restrictions shall not be applicable.
- An exemption is provided for the import of one laptop, tablet, personal computer or a small form factor computer. This exemption shall also be allowed for the purchases undertaken through an e-commerce website through post courier etc. with the payment of import duty.
- Another exemption is provided for importing up to twenty such items as mentioned under the title of 8471 HSN Code for research and development purposes.
- The exemption also includes items purchased for testing, benchmarking, evaluation, repair, re-export and product development.
- The exemption can only be claimed if the items are used for the above-mentioned purposes only and not sold in the market.
- Once the defined purpose is fulfilled, these imported goods need to be disposed of beyond use or re-exported.
- Further, the amendment also proposes that the restricted import licence will not be applicable for the goods being re-imported after the repair has been carried out on the goods abroad.
- The laptop, tablet, computers and other devices under HSN 8471 shall not require an import licence if they are an essential part of the capital goods.
List of Items Restricted for Import under 8471 HSN Code
The goods so made restricted can be summarised through the following table along with their respective 8471 HSN code. The restricted goods that will require an import licence are as follows-
|S. No.||HSN Codes||Item Description||Revised Policy||Revised Policy Condition|
|1||84713010||Personal Computer||Restricted||Condition No. 4|
|2||84713090||Other||Restricted||Condition No. 4|
|3||84714110||Micro Computer||Restricted||Condition No. 4|
|4||84714120||Large or Mainframe Computer||Restricted||Condition No. 4|
|5||84714190||Other||Restricted||Condition No. 4|
|6||87414900||Other Automatic Data Processing Machines and Other Systems||Restricted||Condition No. 4|
|7||87415000||Processing Units||Restricted||Condition No. 4|
Import Policy and Policy Condition Explained
When looking for the rules prescribed for the import of certain goods, you may have come across the terms of import policy and policy conditions. These two terms and their significance are described below-
Import Policy classifies items into three categories. These three categories are-
Restricted Policy requires the importers to get a valid licence for the import of restricted goods before they can receive the goods in the country. The Directorate General of Foreign Trade (DGFT) is the appropriate authority that provides import licences, authorisation and permission for such restricted imports. Under the STE Import Policy, the import is allowed only for the State Trading Enterprises. These imports shall conform to the conditions as laid down under the foreign trade policy. The Free Import Policy does not make it mandatory for the importers to get the import licence, authorisation or any kind of permission from the DGFT. The importers need to follow the policy conditions specified in the relevant chapter for the items they need to import.
Policy Conditions do not imply that the import of specified items will not bear any other restrictions but they include the basic rules regarding the import of the listed items in that schedule. The main purpose of these conditions is to make the schedule user-friendly and provide the relevant details at the same place. The policy conditions can include the requirement of documents to undertake such an import and any exceptions as applicable to certain items.
To sum up, the recent amendment to the import rules, governed by the ITC HS 2022, brings substantial modifications to the import policy, notably impacting the import of computers and data processing devices categorised under the 8471 HSN Code. Issued by the Department of Commerce under the Ministry of Commerce and Industry, this amendment introduces a fresh policy condition while revising the import provisions. Noteworthy changes encompass the restriction of importing laptops, tablets, and other data processing devices, with exceptions limited to specific contexts such as research and development, testing, benchmarking, and repair. Importers must adhere to these new provisions diligently to avoid any legal complications and inconveniences. The import of laptops, tablets and various kinds of computers will no longer be free and shall be regulated through the restricted import licence.
This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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