The Central Board of Indirect Taxes and Customs (CBIC) has clarified that intermediate goods used in manufacturing cellular mobile phones will qualify for concessional import duty, even if not directly imported by handset manufacturers.

In a circular, the CBIC stated that the phrase “for use in manufacture of cellular mobile phones” refers to the use of components in the manufacturing process, not the importer’s identity.

This means manufacturers of intermediate goods operating under the Manufacturing and Other Operations in Warehouse (MOOWR) scheme can avail of concessional duty benefits under the Import of Goods at Concessional Rate (IGCR) Rules, 2022, as long as all conditions are met.

The MOOWR scheme permits manufacturers to import raw materials and capital goods duty-free, while the IGCR framework allows for relaxed customs duties on specific imports provided they align with government-specified purposes such as boosting industries or promoting innovation.

The clarification addresses concerns about the eligibility of intermediate manufacturers benefiting from IGCR exemptions while operating under MOOWR. It also reinforces the simultaneous applicability of duty deferment under MOOWR and IGCR exemptions, provided additional compliance requirements are met.