New Delhi | Mobile manufacturers have demanded roll back of new import norms that mandate companies to provide bank guarantees for availing duty concessions.
They claimed that due to new import rules this fiscal, funds to the tune of Rs 15,000 crore of mobile companies have been blocked and manufacturing in the country has become very complex.
Mobile companies are estimated to have provided up to Rs 15,000 crore in bank guarantee and surety to government when they import components under new IGCR rule. This needs to be changed for ease of doing business in the country, Indian Cellular Association Nation President Pankaj Mohindroo said.
The requirement of continuity bond backed by surety for availing of the concession duty is a new condition under Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods (IGCR) 2016. The result is that the transaction cost and compliance cost, instead of coming down, has actually increased. Industry feels that there should be a trust based system.
As it is, the checks of registrations and penalties for misuse are more than sufficient to deter the black sheep. In case of misuse, the defaulters can be subjected to exemplary penal action, ICA said. The industry body has demanded that government should go back to the simple bond with undertaking system as envisaged under the original IGCR 1999.
In the new rules utilisation period of the imported goods has been reduced to three months compared to six month period allowed earlier. ICA has requested government to restore old rule in this case also for ease of doing business.