Date: Monday, 10 January 2022

1.        BAGGAGE RULES, 2016 :

Rule 3 of the Baggage Rules, 2016 notified by the Ministry of Finance (Department of Revenue) under the notification No. 30/2016-Cus. (N.T.), dated 01-03-2016 (as amended) reads as under :

“3. Passenger arriving from countries other than Nepal, Bhutan or Myanmar. - An Indian resident or a foreigner residing in India or a tourist of Indian origin, not being an infant arriving from any country other than Nepal, Bhutan or Myanmar, shall be allowed clearance free of duty articles in his bona fide baggage, that is to say, -

(a)     used personal effects and travel souvenirs; and

(b)     articles other than those mentioned in Annexure-I, upto the value of fifty thousand rupees if these are carried on the person or in the accompanied baggage of the passenger :

Provided that a tourist of foreign origin, not being an infant, shall be allowed clearance free of duty articles in his bona fide baggage, that is to say,

(a)     used personal effects and travel souvenirs; and

(b)     articles other than those mentioned in Annexure-I, upto the value of fifteen thousand rupees if these are carried on the person or in the accompanied baggage of the passenger :

Provided further that where the passenger is an infant, only used personal effects shall be allowed duty free.

Explanation. - The free allowance of a passenger under this rule shall not be allowed to pool with the free allowance of any other passenger.”

The word “tourist” has been defined under the rule 2(1)(v) of the Baggage Rules, 2016 as - “tourist” means a person not normally resident in India, who enters India for a stay of not more than six months in the course of any twelve months period for legitimate non-immigrant purposes. However, the phrase “Indian Origin” has been left without any definition. The phrase is also not defined under the Customs Act, 1962 to adopt as per the mandate under rule 2(2) of the said Baggage Rules which reads that words and expression used and not defined in these rules but defined in the Customs Act, 1962 (52 of 1962) shall have the same meaning respectively assigned to them in the said Act. As such we will look at other Central Acts to understand the phrase.

2.        DEFINITIONS IN OTHER CENTRAL ACTS : 

2.1.     The Citizenship Act, 1955 : Explanation 2 under section 5(1) of the Citizenship Act, 1955 (57 of 1955) states that for the purposes of the sub-section, a person shall be deemed to be of Indian origin if he, or either of his parents, was born in undivided India or in such other territory which became part of India after the 15th day of August, 1947. The relevant section is extracted below :

“5. Citizenship by registration.— (1) Subject to the provisions of this section and such other conditions and restrictions as may be prescribed, the Central Government may, on an application made in this behalf, register as a citizen of India any person not being an illegal migrant who is not already such citizen by virtue of the Constitution or of any other provision of this Act if he belongs to any of the following categories, namely:—

(a)      a person of Indian origin who are ordinarily resident in India for seven years before making an application for registration;

(b)      a person of Indian origin who is ordinarily resident in any country or place outside undivided India;

(c)       a person who is married to a citizen of India and is ordinarily resident in India for seven years before making an application for registration;

(d)      minor children of persons who are citizens of India;

(e)      a person of full age and capacity whose parents are registered as citizens of India under clause (a) of this sub-section or sub-section (1) of section 6;

(f)        a person of full age and capacity who, or either of his parents, was earlier citizen of independent India, and has been residing in India for one year immediately before making an application for registration;

(g)       a person of full age and capacity who has been registered as an overseas citizen of India for five years, and who has been residing in India for one year before making an application for registration.  

Explanation 1.—For the purposes of clauses (a) and (c), an applicant shall be deemed to be ordinarily resident in India if—

(i)        he has resided in India throughout the period of twelve months immediately before making an application for registration; and

(ii)       he has resided in India during the eight years immediately preceding the said period of twelve months for a period of not less than six years.

Explanation 2.—For the purposes of this sub-section, a person shall be deemed to be of Indian origin if he, or either of his parents, was born in undivided India or in such other territory which became part of India after the 15th day of August, 1947.”

2.2.     The Income-Tax Act, 1961 : Explanation under section 115C(e) of the Income Tax Act, 1961 (43 of 1961) holds that a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India. The section is reproduced as below :

“115C. In this Chapter, unless the context otherwise requires,—

(i)        ………;

(j)        ……..;

(k)       ……..;

(l)        ……..;

(m)    "non-resident Indian" means an individual, being a citizen of India or a person of Indian origin who is not a "resident".

Explanation.—A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India;

(n)   ………. ; “

3.        DEFINITIONS IN NOTIFICATIONS :

Let us look into a few notifications. Explanation in the notification No. F.E.R.A. 111/92-RB, dated 29-02-1992, issued under the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973), though the Act has been repealed and replaced by Foreign Exchange Management Act, 1999 (42 of 1999), offers a good definition for the phrase ‘India Origin’. It is reproduced below :

“Explanation : For the purpose of this notification -

(1)              A person shall be deemed to be of Indian origin if -

(a)       he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution or the Citizenship Act, 1955 (57 of 1955);

or

(b)       he at any time held an Indian passport;

provided that a national of Pakistan or Bangladesh shall be deemed to be not of Indian origin.

(2)              A spouse (not being a national of Pakistan or Bangladesh) of a person of Indian origin shall also be deemed to be of Indian origin.”

Further, DGFT notification issued in 1992 under the provisions of Import Trade Control Order, 1955 [superseded by the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992)] allowing import of gold by passenger baggage for the first time had defined the phrase as follows :

“A person shall be deemed to be of Indian origin, if he held an Indian passport at any time, or he or either of his parents or any of his grandparents, was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955);

provided that the national of Pakistan or Bangladesh shall be deemed to be not of Indian origin.

A spouse (not being a national of Pakistan or Bangladesh) of a person of Indian origin shall also be deemed to be of Indian origin.”

4.        NRI VERSUS PIO :

Indians staying abroad are being called Persons of Indian Origin (PIOs) under the Citizenship Act while they are being termed as Non-Resident Indians (NRIs) under the Income Tax Act. They are people of India by birth or ancestry who live outside India. According to a Ministry of External Affairs there are more than 32 million NRIs/PIOs residing outside India. Every year 25 lakh Indians migrate overseas, which may be the highest annual number of migrants in the world.

4.1.     Non-Resident Indian (NRI) : The term refers only to the tax status of a citizen who, as per section 6 of the Income Tax Act, 1961, has not resided in India for a specified period for the purposes of the Income Tax Act. The rates of income tax are different for persons who are "resident in India" and who are “non-resident in India”. For the purposes of the Income Tax Act, a "resident in India" requires stay in India of at least 182 days in a financial year or 365 days spread out over four consecutive years and at least 60 days in that year. According to the Act, any Indian citizen who does not meet the criteria as a "resident of India" is a non-resident of India and is treated as NRI for the purpose of income tax.

4.2.     Person of Indian Origin (PIO) : PIO means a foreign citizen (except a national of Pakistan, Afghanistan, Bangladesh, China, Iran, Bhutan, Sri Lanka and/or Nepal), who at any time held an Indian passport (but not currently) or either of their parents/grandparents/great-grandparents was born and was a permanent resident in India as defined in Government of India Act, 1935 and other territories that had become part of India thereafter provided neither was at any time a citizen of any of the aforesaid countries (as referred above) or is a spouse of a citizen of India or a Person of Indian Origin.

4.3.     Overseas Citizenship of India (OCI) : A pseudo-citizenship scheme commonly referred to as the OCI card holder. The Constitution of India does not permit full dual citizenship. The OCI card is effectively a long-term visa, with restrictions on voting rights and government jobs. The card is available to certain PIOs, and while it affords holders residency and other rights, it does have restrictions and is not considered to be any type of Indian citizenship from a constitutional perspective.

5.        PIO CARD VERSUS OCI CARD :

Ministry of External Affairs on its official website, www.mea.gov.in, enumerates the conditions and concessions available to PIO and OCI card holders as below :

5.1.     Person of Indian Origin (PIO) Card : PIO card was launched in the year 1999 and was revised as per the Ministry of Home Affairs notification No. 213 dated 19-07-2002) :

“A Person of Indian Origin (PIO) means a foreign citizen (except a national of Pakistan, Afghanistan Bangladesh, China, Iran, Bhutan, Sri Lanka and Nepal) who at any time held an Indian passport;

Or

who or either of their parents/grandparents/great grandparents was born and permanently resident in India as defined in Government of India Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizen of any of the aforesaid countries (as referred above);

Or

Who is a spouse of a citizen of India or a PIO.”

5.2.     Benefits of a PIO card :

(i)    PIO card holders do not require a visa to visit India for a period of 15 years from the date of issue of the PIO card.

(ii)  They are exempted from registration at FRRO/FRO if their stay does not exceeds 180 days. Incase if the stay exceeds 180 days, they shall have to register with FRRO/FRO within the next 30 days.

(iii)           They enjoy parity with NRIs in economic, financial and educational benefits like –

Acquisition, holding, transfer and disposal of immovable properties in India, except agricultural/plantation properties;

Admission of children to educational institutions in India under general category quota for NRIs, including medical and engineering college, IITs, IIMs etc.;

Availing various housing schemes of LIC of India, State Government and Central Government agencies;

All future benefits that would be exempted to NRIs would also be available to the PIO card holders.

However, PIOs do not enjoy employment rights in Government of India services nor can they hold any constitutional office in the Government of India. They need prior permission for undertaking mountaineering, missionary activities, research work and visit restricted areas in India.

5.3.     Overseas Citizen of India (OCI) Card : A foreign national, who was eligible to become citizen of India on 26.01.1950 or was a citizen of India on or at any time after 26.01.1950 or belonged to a territory that became part of India after 15.08.1947 is eligible for registration as Overseas Citizen of India (OCI). Minor children of such person are also eligible for OCI. However, if the applicant had ever been a citizen of Pakistan or Bangladesh, he/she will not be eligible for OCI.

5.4.     Benefits of a OCI card : OCIs are entitled to a multipurpose, multiple entry, lifelong visa allowing them to visit India at any time, for any length of time and for any purpose. They are exempted from police reporting for any length of stay in the country. They have also been granted all rights in the economic, financial and education fields in parity with NRIs except, the right to acquisition of agricultural or plantation properties.

5.5.     Comparison Between PIO Card and OCI Card :

5.6.     Common benefits :

(i)                Separate lines at immigration counters.

(ii)              No visa required for studies.

(iii)            At-par treatment with NRIs in matters regarding to property acquisition, holding & disposal, except agricultural and plantation properties.

6.        CONCLUSION :

Materials shown above shows clearly that a person shall be deemed to be of Indian origin, if he held an Indian passport at any time, or he or either of his parents or any of his grandparents, was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 provided that he is not a national of Pakistan or Bangladesh. A spouse (not being a national of Pakistan or Bangladesh) of a person of Indian origin shall also be deemed to be of Indian origin. Further, it is also seen that neither the PIO card nor the OCI card is meant to be used as a documentary proof for allowing the concessions under the Baggage Rules. The Baggage Rules also doesn’t have any such stipulation that certain proof is required or produced to avail free allowance under the Rules. An important question that arise here may be – “How will the passengers rather tourists of Indian Origin be allowed the benefits under the Baggage Rules?” The answer lies in the fact that 99% of the incoming passengers are getting cleared through customs based on their oral or written declarations without any questions. The Officers may well accept a passenger’s declaration on their origin, citizenship and other status as well, as was being done hitherto for many decades, till it is regulated by the Law makers. It is an accepted legal position that substantial exceptions cannot be denied without proper verification and orders passed following the principles of natural justice.

*****

Author : M P Vasudevan - 10-01-2022