In the notification of the Government of India, in the Ministry of Finance Department of Revenue

## Policy Analysis Report: Amendment to Customs Notification No. 022021-Customs **1. Executive Summary:** This report analyzes an amendment to the Government of India's Customs Notification No. 022021-Customs, dated February 1, 2021. The amendment, detailed in G.S.R. 101(E) and dated February 5, 2021, primarily concerns changes to tariff classifications and descriptions related to goods, specifically those used in cellular mobile phones. The key finding is a clarification and addition of specific harmonized system (HS) codes and their corresponding descriptions, aiming to refine the application of customs duties on these goods. The amendment addresses entries related to S. No. 377A and introduces a new entry, S. No. 377AA. **2. Introduction:** This report aims to provide a comprehensive analysis of the amendment to the Government of India's Customs Notification No. 022021-Customs, as published in the Gazette of India on February 5, 2021. The analysis is based solely on the provided policy text and focuses on understanding the nature, purpose, and implications of the amendment. **3. Policy Overview:** This report analyzes an **amendment** to Customs Notification No. 022021-Customs, dated February 1, 2021. * **Core Objective(s):** Based on the text, the core objective appears to be to refine and clarify the application of customs duties on specific goods, likely components or materials used in the manufacturing of cellular mobile phones. This is inferred from the alterations and additions to the list of items under S.No. 377A, and the creation of S.No. 377AA which includes goods described by their Harmonized System (HS) codes. **4. Background and Rationale:** The amendment appears to be addressing a need for greater specificity or correction in the application of customs duties to goods related to cellular mobile phones. The original notification likely lacked sufficient clarity, leading to potential misinterpretations or inconsistencies in duty application. This amendment seems designed to resolve ambiguities by clarifying the HS codes and descriptions, and including goods omitted previously. The change, specifically the addition of S.No. 377AA, suggests a previously unaddressed category of goods or a need to differentiate between existing categories. **5. Key Provisions / Changes:** This section details the specific changes introduced by the amendment text: * **Change 1:** S. No. 377A is substituted with the following entries: * The original text lacks detail about the previous entry for S. No. 377A. The new entry includes all goods other than SIM socket or other mechanical items for cellular mobile phone. * The effect of this change is to clarify the items included in S. No. 377A. * **Change 2:** A new S. No. 377AA is added with the following details: * **New Rule/Provision:** S. No. 377AA includes HS codes 7318 15 00, 7318 15; 16 00, 7318 29 90, and the description "All goods". * **Effect of Change:** Creates a new category ("All goods" under HS codes 7318 15 00, 7318 15; 16 00, 7318 29 90) that are now explicitly addressed under the customs notification. * **Change 3:** Edits to paragraph II include: * **Specific part of original policy being changed:** "at the page number 20, in paragraph II., for 2 clause b, c and e shall be omitted; read 2 clause b, c and e shall be omitted" * **New Rule/Provision:** In the second proviso, the text "and 377A" is substituted with "and 377A and 377AA". * **Effect of Change:** This change suggests that certain clauses related to 377A were eliminated, and that goods in S.No. 377AA are treated similarly to those in S.No. 377A. **6. Target Audience and Stakeholders:** Based on the text, the primary target audience and stakeholders are: * Manufacturers and importers of components and materials used in the production of cellular mobile phones. * Customs officials responsible for classifying and levying duties on imported goods. * Any businesses involved in the supply chain of cellular mobile phone manufacturing. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Department of Revenue, Ministry of Finance, is the responsible body, as indicated by the notification's origin. The "Dte. of Printing at Government of India Press" and the "Controller of Publications, Delhi" are responsible for publishing the notification. * **Timelines/Procedures:** The amendment is effective from February 5, 2021 (date of publication). Specific procedures for implementing the changes would be detailed in separate operational guidelines or circulars issued by the Central Board of Indirect Taxes and Customs (CBIC), though these are not mentioned within the text itself. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of these changes are: * **Increased clarity:** Reduction in ambiguity regarding the classification and duty rates applicable to specific goods used in cellular mobile phones. * **Fairer application of duties:** Ensuring consistent application of customs duties across different importers and goods. * **Improved revenue collection:** Potentially increasing revenue collection by clarifying the scope of taxable goods and ensuring correct classification. The inclusion of "all goods" under new HS codes could widen the tax base. * **Reduced disputes:** Minimizing potential disputes arising from misinterpretations of the original notification. **9. Conclusion:** The amendment to Customs Notification No. 022021-Customs represents a refinement of existing regulations concerning the import of goods used in cellular mobile phone manufacturing. By clarifying HS codes and descriptions and introducing a new goods category (S. No. 377AA), the amendment aims to enhance clarity, ensure consistent duty application, and potentially improve revenue collection. The changes are significant for manufacturers, importers, and customs officials involved in the cellular mobile phone supply chain, as they provide greater certainty and reduce the potential for disputes.

Key Entities Referenced