THE BAGGAGE RULES, 2016 – A CLOSER LOOK.

Date: Saturday, 3 December 2016


For Representational Purpose Only

Recently, I have been receiving a lot of queries regarding the allowances and concessions offered to persons travelling abroad on pleasure trips or job contracts and returning to India. A “Google Search” on the web threw up a few government and private websites presenting such information. However, while most of them have sketchy details others are still displaying the outdated provisions under the already rescinded old Baggage Rules. It prompted me to have a closer look into the concessions available under the new Baggage Rules and allied Laws to these persons travelling overseas and returning to India.

I.                   GENERAL ALLOWANCES

1.      Duty free allowances:

In the new Rules, the Baggage Rules, 2016, [notified vide M.F. (D.R.) notification No. 30/2016-Customs (N.T.), dated 01.03.2016 as amended vide notification No. 43/2016-Customs (N.T.) dated 31.03.2016 and corrected vide corrigendum F.No. 520/09/2016-Cus.VI dated 01.04.2016], general allowances for Indian Residents or Tourists of Indian Origin returning from abroad as per rule 3 and 4 therein are as under:

A.    For passengers coming from countries other than Nepal, Bhutan or Myanmar:

 

Duty Free Entitlements For Bonafide Baggage

For Passengers Other than Infants

For Infant Passengers

(a)

Used personal effects (excluding jewellery) required for satisfying daily necessities of life

Free

Free

(b)

Other articles other than those mentioned in Annexure I

Rs. 50,000/-

Nil

B.     For passengers coming from Nepal, Bhutan or Myanmar by air:

 

Duty Free Entitlements For Bonafide Baggage

For Passengers Other than Infants

For Infant Passengers

(a)

Used personal effects (excluding jewellery) required for satisfying daily necessities of life

Free

Free

(b)

Other articles other than those mentioned in Annexure I

Rs. 15,000/-

Nil

Annexure I is as reproduced below:

“ANNEXURE–I

1.       Fire arms.

2.       Cartridges of fire arms exceeding 50.

3.       Cigarettes exceeding 100 sticks or cigars exceeding 25 or tobacco exceeding 125 gms.

4.       Alcoholic liquor or wines in excess of two litres.

5.       Gold or silver in any form other than ornaments.

6.       Flat Panel (Liquid Crystal Display/ Light - Emitting Diode/ Plasma) television.

For the purpose of these rules a “Resident” means a person holding a valid passport issued under the Passports Act, 1967 (15 of 1967) and normally residing in India while an “Infant" means a child not more than two years of age. It has also been provided that where the passenger is arriving from Nepal, Bhutan or Myanmar by land route, only used personal effects shall be allowed duty free. In all the above cases the free allowance of a passenger shall not be allowed to be pooled with the free allowance of any other passenger.

In addition to the above said free allowances, one laptop computer (notebook computer) is also allowed duty free if imported by any passenger of the age of 18 years and above [M.F. (D.R.) Notification No. 11/2004-Cus., dated 08-01-2004].

A passenger residing abroad for more than one year, on return to India, shall be allowed clearance free of duty in his bona fide baggage of jewellery upto a weight, of twenty grams with a value cap of fifty thousand rupees if brought by a gentleman passenger, or forty grams with a value cap of one lakh rupees if brought by a lady passenger.

2.      Duty on articles beyond free allowances:

Articles over and above the free allowances shall be chargeable to basic customs duty @ 35% plus an education cess of 3%, i.e. to say the effective rate of 36.05%. In case the value of any one item exceeds the duty free allowance, duty shall be calculated only on the value in excess of free allowance. Alcoholic drinks imported in excess of free allowance are chargeable to customs duty at the rates applicable to their commercial imports as per the Customs Tariff Act, 1975 (i.e. BCD 150% + ACD 4%) while tobacco products at the rates applicable at Customs Tariff Heading 98.03 (i.e. BCD 100% + Cess 3%).

3.      Import of gold and silver as baggage:

Any passenger of Indian origin or a passenger holding a valid passport, issued under the Passports Act, 1967 (15 of 1967), who is coming to India after a period of not less than six months of stay abroad; and short visits, if any, made by the passenger during the aforesaid period of six months shall be ignored if the total duration of stay on such visits does not exceed thirty days and such passenger has not availed of the exemption under this notification at any time of such short visits. The import is allowed under the conditions that:

·         the duty is paid in convertible foreign currency [current rate of duty as per Notification No. 12/2012-Cus dated 17-03-2012 is 10% + 3%];

·         the total quantity of gold (including ornaments) does not exceed one kilogram and the quantity of silver does not exceed ten kilograms per passenger and is carried by the passenger at the time of his arrival in India, or imported by him within fifteen days of his arrival in India, or is taken delivery of from a customs bonded warehouse of the State Bank of India or the Minerals and Metals Trading Corporation Ltd., provided such passenger files a declaration in the prescribed form before the proper officer of customs at the time of his arrival in India declaring his intention to take delivery of the gold or silver from such a customs bonded warehouse and pays the duty leviable thereon before his clearance from customs.

Value of gold and silver in U.S. Dollar and the rate of conversion for the purpose of calculation of duty is taken as per the tariff value and conversion rate fixed under M.F. (D.R.) notification issued from time to time [these notifications are being issued twice in a month].

4.      Export of bonfide baggage:

Passengers leaving India are allowed to carry any articles including jewellery in their bonafide baggage without any value limit. However, prohibited and restricted articles are not allowed.

II.                TRANSFER OF RESIDENCE

1.      Articles allowed free of duty:

In the new Rules, persons who are transferring their residences to India after a stay of three to six months, six months to one year, one year to two years and two years or more are allowed duty free clearance of articles in their baggage as specified in the Appendix under rule 6 thereto. The rule allows a person, who is engaged in a profession abroad, or is transferring his residence to India, clearance free of duty in addition to what he is allowed under rule 3 or, as the case may be, under rule 4, articles in his bona fide baggage to the extent mentioned in column (2) of the Appendix, subject to the conditions, if any, mentioned in the corresponding entry in column (3) and relaxation in column (4) of the said Appendix.

The Appendix is as reproduced below:

“APPENDIX

Duration of stay abroad

Articles allowed free of duty

Conditions

Relaxation

(1)

(2)

(3)

(4)

From three months upto six months

Personal and household articles, other than those mentioned in Annexure I or Annexure II but including articles mentioned in Annexure III upto an aggregate value of sixty thousand rupees.

Indian passenger

-

From six months upto
one year

Personal and household articles, other than those mentioned in Annexure I or Annexure II but including articles mentioned in Annexure III, upto an aggregate value of one lakh rupees.

Indian passenger

-

Minimum stay of one year during the preceding two years.

Personal and household articles, other than those mentioned in Annexure I or Annexure II but including articles mentioned in Annexure III upto an aggregate value of two lakh rupees.

The Indian passenger should not have availed this concession in the preceding three years.

-

Minimum stay of two years or more.

Personal and household articles, other than those listed at Annexure I or Annexure II but including articles mentioned in Annexure III upto an aggregate value of five lakh rupees.

(i) Minimum stay of two years abroad, immediately preceding the date of his arrival on transfer of residence;

(a) For condition (i), shortfall of upto two months in stay abroad can be condoned by Deputy Commissioner of Customs or Assistant Commissioner of Customs if the early return is on account of :-

(i) terminal leave or vacation being availed of by the passenger; or

(ii) any other special circumstances for reasons to be recorded in writing.

(ii) Total stay in India on short visit during the two preceding years should not exceed six months; and

(b) For condition (ii), the Principal Commissioner of Customs or Commissioner of Customs may condone short visits in excess of six months in special circumstances for reasons to be recorded in writing.

(iii) Passenger has not availed this concession in the preceding three years.

No relaxation.”

In the case of persons transferring their residences into India the following articles in their baggage are allowed free of duty under the Baggage Rules, 2016.

Ø  Used personal effects and travel souvenirs allowed without any value limit as per rule 3 or 4 as the case may be. This do not include personal jewellery since clause (1)(vi) under rule 2 defines “personal effects” not to include jewellery.

Ø  Articles other than those mentioned in Annexure I of the Baggage Rules, 2016 [shown above], upto the value of fifty thousand rupees are permitted as per rule 3 or 4 as the case may be, if they are carried on the person or in the accompanied baggage of the passenger. This allowance is not available in the case of unaccompanied baggage.

Ø  Personal and household articles, other than those mentioned in Annexure I or Annexure II of the Baggage Rules, 2016 but including articles mentioned in Annexure III upto an aggregate value of - (i) sixty thousand rupees to those transferring their residences after a stay of three to six months, (ii) one lakh rupees to those in the category of six months to one year, (iii) two lakh rupees to those in the group of one year to two years, and (iv) five lakh rupees for those returning after two years or more are also allowed free of duty. Annexure II and III of the Baggage Rules, 2016 are reproduced below:

“ANNEXURE-II

1.       Colour Television.

2.       Video Home Theatre System.

3.       Dish Washer.

4.       Domestic refrigerators of capacity above 300 litres or its equivalent.

5.       Deep Freezer.

6.       Video camera or the combination of any such Video camera with one or more of the following goods, namely: -

(a)                 television receiver;

(b)                sound recording or reproducing apparatus;

(c)                 video reproducing apparatus.

7.       Cinematographic films of 35mm and above.

8.       Gold or Silver, in any form, other than ornaments.

ANNEXURE-III

1.       Video Cassette Recorder or Video Cassette Player or Video Television Receiver or Video Cassette Disk Player.

2.       Digital Video Disc player.

3.       Music System.

4.       Air-Conditioner.

5.       Microwave Oven.

6.       Word Processing Machine.

7.       Fax Machine.

8.       Portable Photocopying Machine.

9.       Washing Machine.

10.    Electrical or Liquefied Petroleum Gas Cooking Range.

11.    Personal Computer (Desktop Computer).

12.    Laptop Computer (Note book Computer).

13.    Domestic Refrigerators of capacity up to 300 litres or its equivalent.”

It is pertinent to note that in the now superseded Rule, the Baggage Rules, 1998 [M.F. (D.R.) Notification No. 30/98-Cus., (N.T.), dated 02.06.1998 as amended], an additional free allowance on the personal jewellery and a specific provision to bring back the jewellery taken out earlier by the person or a member of his family from India subject to the satisfaction of the Assistant Commissioner of Customs were available. However, these are done away with in the new Rule. As such, a proper export certificate for any jewellery being exported may be obtained from the Precious Cargo Customs Clearance Centre (PCCCC) at Bandra-Kurla Complex, Bandra (East), Mumbai – 400051 well in advance. Import of unlimited used household articles under the old Transfer of Residence Rules also is not available any more.

2.      Items allowed under concessional duty:

In addition to the above, any person returning after one year or two years of stay abroad are given additional concessions under M.F. (D.R.) notification No. 27/2016-Customs dated 31.03.2016 as shown below:

Duration of stay

Articles allowed

Conditions

Any person holding a valid Indian passport and returning to India after having stayed abroad for at least 365 days during the two years immediately preceding the date of arrival in India

Goods specified in the TABLE I allowed duty free and goods specified in TABLE II on 15% (BCD) + 3% (Cess)

(i)  such person has been working abroad;

(ii)  the goods (other than those purchased from the duty free shops) not accompanying such passenger were shipped or despatched or arrived within the time limits specified;

(iii) such person should not have availed this concession in the preceding three years; and

(iv) in respect of such goods not more than one unit shall be permissible and the total aggregate value of such goods imported free of duty by him shall not exceed rupees two lakh.

Any person on a bona fide transfer of residence to India

(i) such person has been residing abroad for a minimum period of two years immediately preceding the transfer of residence and has not availed this concession in the preceding three years;

(ii) the goods (other than those purchased from the duty free shops) not accompanying such passenger were shipped or despatched or arrived within the time limits specified;

(iii) not more than one unit of each item of such goods shall be permissible per family and the person claiming the benefit of this notification affirms by a declaration that no other member of the family had availed of, or would avail of, the benefit of this notification in respect of that item; and

(iv) the total aggregate value of such goods shall not exceed rupees five lakh.

 

Table I and II of M.F. (D.R.) notification No. 27/2016-Customs dated 31.03.2016 are reproduced below:

“TABLE-I

Sl. No.

Goods

(1)

(2)

1.

Video Cassette Recorder or Video Cassette Player or Video Television Receiver or Video Cassette Disk Player.

2.

Digital Video Disc player.

3.

Music System.

4.

?Air-Conditioner.

5.

Microwave Oven.

6.

Word Processing Machine.

7.

Fax Machine.

8.

Portable Photocopying Machine.

9.

Washing Machine.

10.

Electrical or Liquefied Petroleum Gas Cooking Range.

11.

Personal Computer (Desktop Computer).

12.

Laptop Computer (Note-book Computer).

13.

?Domestic Refrigerators of the capacity up to 300 litres or its equivalent.

 

TABLE-II

Sl. No.

Goods

(1)

(2)

1.

Colour Television

2.

?Video Home Theatre System.

3.

Dish Washer.

4.

Domestic Refrigerators of capacity above 300 litres or its equivalent.

5.

Deep Freezer.

6.

Video camera or the combination of any such video camera with one or more of the following goods, namely: -

(a) television receiver;

(b) sound recording or reproducing apparatus;

(c) video reproducing apparatus.

7.

Cinematographic films of 35mm and above.

8.

Gold or silver, in any form, other than ornaments.”

 

3.      Import of vehicle under TR:

Persons coming into India for permanent settlement after two years of continuous stay abroad are allowed to import one car with certain relaxation in the import policy conditions but on payment of customs duty at the rates applicable to their commercial imports as per the Customs Tariff Act, 1975 [BCD @ 125% + CVD @ 24% + ACD 4% + Edu. Cess @ 3% + Infra. Cess @ 4% + NCCD @ 1%] provided the car has been in the possession of the individual for a period of minimum one year abroad. Since the Customs Tariff Heading 9803 does not to apply to motor vehicles as per the chapter notes under Chapter 98 in which the baggage is classified, as such concessions under the Baggage Rules are not applicable.

4.      Conditions for import of firearms:

Rule 3, 4 and 6 of the Baggage Rules, 2016 read with Annexure I thereto shows that firearms cannot be allowed to be brought into India free of customs duty. “Firearms” fall under the restricted category of import policy mentioned in ITC(HS) classification also. However, by virtue of M.F. (D.R.)’s instructions F.No. 497/57/87-Cus.VI, dated 05-01-1988, one firearm is allowed to the person returning on transfer of residence subject to the conditions that - (i) the same was in his possession and use abroad for a minimum period of one year, and (ii) such firearm after clearance shall not be sold, transferred, loaned or otherwise parted with for consideration or otherwise during the life time of person concerned. In addition, no person is entitled to bring into India any arms unless he holds a valid licence issued in accordance with the provisions of the Arms Act and Rules. Thus the firearm can only be cleared on production of a valid licence under the Arms Act and on payment of duty at the rate of 100% (BCD) + 3% (Cess), in view of the exclusion of firearms under rule 3, 4 and 6 read with Annexure 1 of the Baggage Rules, 2016 and para 2 of the M.F. (D.R.) notification No. 26/2016-Cus., dated 31-03-2016. The decision to allow one firearm was reiterated vide C.B.E. & C.’s circulars No. 3/95-Cus., dated 12-01-1995 and No. 63/95-Cus., dated 07-06-1995. Further, C.B.E. & C.’s circular No. 4/2013-Cus., dated 15-01-2013 also allowed persons importing a firearm as baggage on transfer of residence to dispose of the same after ten years of import to persons legally entitled to possess the firearm. The condition that no disposal can take place till ten years of import shall be endorsed on the arms licence of the passenger at the time of granting the facility under transfer of residence. An eligible person would be allowed to import only one firearm under transfer of residence in his/her lifetime.

III.             FOREIGN AND INDIAN CURRENCY:

Rule 7 of the Baggage Rules, 2016 directs that the import and export of currency shall be governed in accordance with the provisions of the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015, and the notifications issued thereunder.

1.      Import of Foreign currency:

Import of Foreign exchange is regulated under clause 6 of the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 [notification No. FEMA 6(R)/RB-2015 dated 29-12-2015] and requires a declaration if the Foreign currency being imported by any person is above a threshold limit. The rule states that a person may bring into India from any place outside India without limit foreign exchange (other than unissued notes), subject to the condition that such person makes, on arrival in India, a declaration to the Customs authorities in Currency Declaration Form (CDF); provided that it shall not be necessary to make such declaration where the aggregate value of the foreign exchange in the form of currency notes, bank notes or traveller's cheques brought in by such person at any one time does not exceed US$ 10,000 or its equivalent and/or the aggregate value of foreign currency notes brought in by such person at any one time does not exceed US$ 5,000 or its equivalent. In other words, currency declaration is required in case the currency notes exceed US$ 5,000 or equivalent or in case the currency notes along with, bank notes and traveller's cheques exceed US$ 10,000.

2.      Export of Foreign currency:

Export of Foreign exchange is regulated under clause 7 of the said regulations. It allows any person (say any passenger) to take out of India any amount of foreign exchange obtained by him by drawal from an authorised person in accordance with the provisions of the Foreign  Exchange Management Act, 1999 or the Rules or Regulations made thereunder; any amount of foreign exchange possessed by him in accordance with the Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015; any amount of unspent foreign exchange brought back by him to India while returning from travel abroad and retained by him in accordance with the Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015; and any person resident outside India (say Non-Resident Indian or foreigner) the unspent foreign exchange not exceeding the amount brought in by him and declared in accordance with the clause 6, on his arrival in India. The Regulations thus permit export of any amount of foreign exchange that is legally acquired by the passenger. Further, while the proviso under clause 6 of the Regulation demands declaration of foreign exchange above a threshold limit on import, the clause 7 is silent about any declaration on export of it.

3.      Import and Export of Indian Currency:

Import and export of Indian currency is regulated under clause 3 of the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015. It allows –

ü  any person resident in India to take outside India (other than to Nepal and Bhutan) currency notes up to an amount not exceeding Rs. 25,000/- per person;

ü  any person who had gone out of India on a temporary visit, to bring into India at the time of his return from any place outside India (other than from Nepal and Bhutan), currency notes up to an amount not exceeding Rs. 25,000/- per person; and

ü  any person resident outside India, not being a citizen of Pakistan or Bangladesh, and visiting India, to take outside India or bring into India currency notes up to an amount not exceeding Rs. 25,000 per person. 

4.      Practice of Clearance at Indian airports:

The scheme of clearance of passengers in vogue for many decades at the International Airports across India shows that on the arrival side, i.e. import of passengers’ baggage, clearance is regulated under the Baggage Rules, currently the Baggage Rules, 2016. This is further fortified with the Customs Baggage Declaration Regulations, 2013 prescribing Form-I for the declaration of the passengers’ baggage [notification No. 90/2013-Customs (N.T.) dated 29-08-2013] though after the latest amendments the incoming passengers who do not carry any dutiable goods in their baggage or person need not file this declaration. These forms are being distributed by the airlines on board the aircraft itself. In addition, there exists a system of ‘Green’ and ‘Red’ channels for fast clearance, etc. There are counters earmarked for the declaration of foreign currency also in the Arrival Hall. However, on the departure side, i.e. export of passengers’ baggage, there is neither any notified Baggage Rules nor any procedure for declaration of the contents of the baggage by the passengers or clearance of each and every passenger by the Proper Officer. The clearance by the customs Officers by stamping the stub of the Airline Boarding Card of the passenger which was introduced vide Ministry’s letter F.No. 481/34/75-Cus.VII, dated 20-10-1975 and the Customs Desk at the Departure Hall was replaced by a ‘Facilitation Desk’ vide the Board’s letter F.No. 520/32/2004-Cus.VI, dated 16-05-2005. Thereafter, this facilitation desk having just one or two officers deals with the issuance of export certificates for high valued items, except jewellery, being exported by the passengers and meant to be re-imported, in case, a passenger approaches them.

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Author : M.P. Vasudevan - 03-12-2016