Date: Monday, 12 March 2018

In addition to the normal duty free allowances applicable on the import and clearance of baggage of passengers, the Government of India has permitted certain additional concessions on the articles in the baggage of persons engaged in their profession abroad and transferring their residence to India. These concessions are being allowed under various notifications issued from time to time by the Department of Revenue (D.R.) under the Ministry of Finance (M.F.), Government of India. The Central Board of Excise and Customs (C.B.E. & C.), which is proposed to be renamed as the Central Board of Indirect Taxes and Customs (C.B.I. & C.) who administers these rules and regulations, also issues circulars and instructions for their proper implementation. This article is an attempt to bring together various concessions available for a person working or engaged in his profession abroad and transferring his residence to India.

Transfer of Residence Rules

Any person engaged in a profession abroad for more than three months and transferring his/her residence to India is allowed clearance of articles in his accompanied or unaccompanied bona fide baggage under rule 6 of the Baggage Rules, 2016 [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]. This is in addition to the general free allowance available to him/her under rule 3 or 4 of the Rules ibid. Those 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 bona fide baggage as specified in the Appendix under rule 6 thereto. Rule 6 is as reproduced below:

“6. Transfer of residence. - (1) A person, who is engaged in a profession abroad, or is transferring his residence to India, shall, on return, be allowed 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 below, subject to the conditions, if any, mentioned in the corresponding entry in column (3) of the said Appendix.

(2) The conditions mentioned in column (3) of the said Appendix may be relaxed to the extent mentioned in column (4) of the said Appendix.

APPENDIX

Articles Allowed Free of Duty

In the case of persons transferring their residences the following articles in their baggage are allowed free of duty under rule 3 or 4 of the Baggage Rules, 2016.

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

2.     Articles other than those mentioned in Annexure I of the Baggage Rules, 2016, upto the value of fifty thousand rupees are permitted 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.

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

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

3.     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 I, II and III of the Baggage Rules, 2016 are 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.

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 important to note that in the old Rules, the Baggage Rules, 1998 [M.F. (D.R.) notification No. 30/98-Customs (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 by 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. The facility of free import of unlimited used household articles is also not available any more.

Articles Allowed Under Concessional Rate of 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:

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

“TABLE-I

TABLE-II

Definition of Personal Effects

“Personal effects” is defined under clause (1)(vi) of rule 2 of the Baggage Rules, 2016 as the things required for satisfying daily necessities but does not include jewellery. However, to have a fair idea about the articles which can be cleared as personal effects one can take the help of the C.B.E. & C.’s circular No. 72/98-Customs dated 24.09.1998 issued from F.No. 520/136/92-Cus.VI, though the list looked outdated. Accordingly, personal effects may include the following articles:

(i)                Personal jewellery.

(ii)              One camera with film rolls not exceeding twenty.

(iii)            One video camera/camcorder with accessories and with video cassettes not exceeding twelve.

(iv)            One pair of binoculars.

(v)              One portable colour television (not exceeding 15 cms in size).

(vi)            One music system including compact disc player.

(vii)          One portable typewriter.

(viii)        One perambulator.

(ix)            One tent and other camping equipment.

(x)               One computer (laptop/note book).

(xi)            One electronic diary.

(xii)          One portable wireless receiving set (transistor radio).

(xiii)        Professional equipments, instruments and apparatus of appliances including professional audio/video equipments.

(xiv)        Sports equipments such as one fishing outfit, one sporting firearm with fifty cartridges, one non-powdered bicycles, one canoe of ranges less than 51 metres long, one pair of skids, two tennis rackets, one golf set (14 pcs. with a dozen of golf balls).

(xv)          One cell phone.

Import of Used Vehicles/Cars

Persons coming to India for permanent settlement after two years of continuous stay abroad are allowed to import one used passenger car with certain relaxation in the import policy conditions but on payment of normal rate of customs duty, IGST and cess provided the car has been in the possession and use of that person for a period of minimum one year. Evidence to prove the ownership and use of the vehicle is required to be submitted for clearance. Since the Customs Tariff Heading 9803 does not to apply to motor vehicles as per the chapter notes under chapter 98 under which the baggage articles are classified, customs duty at tariff rate is payable and concessions under the Baggage Rules are not applicable.

Conditions on 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 under the Foreign Trade Policy. 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 the same was in his possession and use abroad for a minimum period of one year, and 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 permitted to bring into India any arms unless he holds a valid licence issued in accordance with the provisions of the Arms Act, 1959 and the Rules made thereunder. So the firearm can only be cleared on production of a valid licence under the Arms Act, 1959 and on payment of duty at the rate of 100% (BCD) + 10% (Social Welfare Surcharge), 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-Customs dated 31.03.2016. The decision to allow one firearm was reiterated vide C.B.E. & C.’s circulars No. 3/95-Customs dated 12.01.1995 and No. 63/95-Customs dated 07.06.1995. Further, C.B.E. & C.’s circular No. 4/2013-Customs 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 such firearm. The condition that no disposal can take place till ten years of import will 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.

Import of Pet Dogs or Cats

C.B.E. & C. circular No. 15/2013-Customs dated 08.04.2013 allows the import of two pet animals (dogs and cats only) as baggage by persons who are transferring their residence to India after two years of continuous stay abroad subject to the production of required health certificate from the country of origin and examination of the pets by the concerned Quarantine Officer in India. DGFT notification No. 3/2015-20 dated 25.04.2016 allows import of dogs as pets with valid pet book and relevant records/documents in the name of the importer and not for commercial purpose like breeding and other commercial activities. They attract customs duty @ 35% ad valorem [notification No. 26/2016-Customs dated 31.03.2016] and social welfare surcharge @ 10% of duty [social welfare surcharge is levied on imported goods with effect from 2nd February, 2018, under clause 108 of the Finance Bill, 2018]. Passengers may contact the ACQS at Delhi, Mumbai, Kolkata or Chennai for quarantine procedure for the pets imported into India.

Rate of Duty on Other Articles

1. CIGARETTES [exceeding 100 or cigars exceeding 25 or tobacco exceeding 125 grams] :

Basic Customs Duty : @ 30% ad valorem [excluded from chapter 98 as per Chapter Notes and duty as under Customs Tariff Heading 24.02]; Integrated Tax under section 3(7) of the Customs Tariff Act, 1975 : @ 28% [notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017]; Compensation Cess as per notification No.1/2017-Compensation Cess (Rate) dated 28.06.2017 and Social Welfare Surcharge : @ 10% of duty [social welfare surcharge levied on imported goods with effect from 2nd February, 2018, under clause 108 of the Finance Bill, 2018.]

2. ALCOHOLIC LIQUOR [alcoholic liquor or wines in excess of two litres] :

Basic Customs Duty : @ 150% ad valorem [excluded from chapter 98 as per Chapter Notes and duty as under Customs Tariff Heading 22.08]; Additional Duty of Customs : Nil [notification No. 82/2007-Customs dated 03.07.2007] and Social Welfare Surcharge : Nil [notification No. 11/2018-Customs dated 02.02.2018].

3. WINE OF FRESH GRAPES [alcoholic liquor or wines in excess of two litres] :

Basic Customs Duty : @ 150% ad valorem [excluded from chapter 98 as per Chapter Notes and duty as under Customs Tariff Heading 22.04]; Additional Duty of Customs : Nil [notification No. 82/2007-Customs dated 03.07.2007] and Social Welfare Surcharge : Nil [notification No. 11/2018-Customs dated 02.02.2018].

4. BEER MADE FROM MALT :

Basic Customs Duty : @ 100% ad valorem [excluded from chapter 98 as per Chapter Notes and duty as under Customs Tariff Heading 22.03]; Social Welfare Surcharge : @ 10% of duty [social welfare surcharge levied on imported goods with effect from 2nd February, 2018, under clause 108 of the Finance Bill, 2018] and Additional Duty of Customs : Nil [notification No. 82/2007-Customs dated 03.07.2007].

5. FIRE ARMS & CARTRIDGES EXCEEDING 50 :

Basic Customs Duty : @ 100% ad valorem [under Customs Tariff Heading 98.03 since notification No. 26/2016-Customs dated 31.03.2016 is not applicable as per para 2]; Social Welfare Surcharge : @ 10% of duty [social welfare surcharge levied on imported goods with effect from 2nd February, 2018, under clause 108 of the Finance Bill, 2018] and Integrated Tax under section 3(7) of the Customs Tariff Act, 1975 : Nil [notification No. 183/86-Customs dated 01.03.1986 (as amended)].

6. FIRE ARMS – EXEMPTION FOR SPORTS PERSONS :

Basic Customs Duty : @ 50% ad valorem [concessional duty when imported by a renowned shot as under notification No. 147/94-Customs dated 13.07.1994 (as amended)]; Social Welfare Surcharge : @ 10% of duty [social welfare surcharge levied on imported goods with effect from 2nd February, 2018, under clause 108 of the Finance Bill, 2018] and Integrated Tax under section 3(7) of the Customs Tariff Act, 1975 : Nil [notification No. 183/86-Customs dated 01.03.1986 (as amended)].

7. GOLD BARS/ORNAMENTS :

[1 kilogram per eligible passenger – For conditions and concessional duty rates please refer to the notification No. 50/2017-Customs dated 30.06.2017]

8. SILVER IN ANY FORM :

[10 kilogram per eligible passenger – For conditions and concessional duty rates please refer to the Notification No. 50/2017-Customs dated 30.06.2017]

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Author : M.P. Vasudevan - 12-03-2018