## Report on Customs Duty Exemption for Manufacturing of Wrist Wearable Devices
**1. Executive Summary:**
This report analyzes Notification No. 11/2022-Customs, G.S.R. 85(E), issued by the Ministry of Finance, Department of Revenue on February 1, 2022. This notification introduces customs duty exemptions on the import of goods used in the manufacture of wrist wearable devices, commonly known as smart watches. The core purpose is to reduce the cost of manufacturing these devices in India by lowering import duties on specific components and raw materials. The report identifies specific goods benefiting from this exemption, the applicable duty rates, and the conditions attached to availing the benefits. The key finding is that this policy aims to boost domestic manufacturing of smart watches by providing financial incentives through reduced customs duties.
**2. Introduction:**
This report aims to provide a detailed overview and analysis of Notification No. 11/2022-Customs, G.S.R. 85(E), based solely on the text provided. The report examines the notification's purpose, key provisions, affected stakeholders, implementation aspects, and expected outcomes.
**3. Policy Overview:**
This is a *new* policy specifically addressing customs duty exemptions.
* **Core Objective(s):** The primary objective, as inferred from the text, is to incentivize and support the domestic manufacturing of wrist wearable devices (smart watches) by reducing the import costs of specific components, inputs, and raw materials used in their production.
**4. Background and Rationale:**
* **Likely Problem/Issue Addressed:** The policy likely addresses the issue of high import costs hindering domestic manufacturing of smart watches. By reducing customs duties on key components, the government aims to make domestic production more competitive against imports and encourage companies to manufacture smart watches within India.
**5. Key Provisions:**
The notification exempts specific goods, falling under defined chapters/headings/subheadings/tariff items of the Customs Tariff Act, 1975, from a portion of the customs duty leviable upon import into India. The amount of exemption is calculated based on the "standard rate" specified in the notification's table.
The specific goods and applicable duty rates are outlined in the table within the notification, including:
* Vibrator motor (8501): Standard rate of 10%.
* Inputs/parts/subparts for vibrator motor manufacture (Any Chapter): Standard rate of Nil.
* Battery (8507 60 00/8507 80 00): Standard rate of Nil.
* Inputs/parts/subparts for battery manufacture (Any Chapter): Standard rate of Nil.
* Printed Circuit Board Assembly (PCBA) (8517 79 10): Standard rate of Nil/10%/15%.
* Inputs/parts/subparts for PCBA manufacture (Any Chapter): Standard rate of Nil.
* Display assembly (8517 79 90): Standard rate of Nil/5%/10%.
* Inputs/parts/subparts for display assembly manufacture (Any Chapter): Standard rate of Nil.
* Charging cable (8544): Standard rate of Nil/5%/10%/15%.
* Inputs/parts/subparts for charging cable manufacture (Any Chapter): Standard rate of Nil.
* Specific parts, components, and accessories like watch dials, straps, key housings etc. (39, 73, 85): Standard rate of Nil/5%/10%/15%.
* Inputs/parts/subparts for the parts listed above (Any Chapter): Standard rate of Nil.
The exemption is subject to conditions as specified in the Annexure.
**6. Target Audience and Stakeholders:**
The primary target audience and stakeholders are manufacturers of wrist wearable devices (smart watches) in India. This includes companies that import components, parts, and subparts for use in their manufacturing processes. The government and consumers are also stakeholders, as the policy aims to boost domestic manufacturing and potentially lower prices for consumers.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency/Bodies:** The Ministry of Finance (Department of Revenue) is the responsible body for issuing and administering this notification. The Customs authorities are responsible for implementing the duty exemptions at the point of import.
* **Timelines/Procedures:** Importers must follow the procedure specified in the Customs Import of Goods at Concessional Rate of Duty Rules, 2017, to avail the concessional duty rates (Condition 1 of Annexure). The duty exemptions have varying validity periods, as specified in the Annexure Conditions 2-6:
* Valid from 1st April, 2022 onwards
* Valid from 1st April, 2022 upto 31st March, 2023
* Valid from 1st April, 2023 upto 31st March, 2024
* Valid from 1st April, 2024 upto 31st March, 2025
* Valid from 1st April, 2025 onwards
* This notification comes into force on February 2, 2022
**8. Expected Outcomes/Impact of Changes:**
The likely intended outcomes include:
* Reduced manufacturing costs for smart watches in India.
* Increased domestic production of smart watches.
* Attraction of investment in the smart watch manufacturing sector.
* Potential decrease in prices for consumers due to lower manufacturing costs.
* Increased competitiveness of Indian-made smart watches in the global market.
**9. Conclusion:**
Notification No. 11/2022-Customs is a significant step towards promoting domestic manufacturing of wrist wearable devices (smart watches) in India. By offering customs duty exemptions on crucial components and inputs, the policy aims to lower production costs, attract investment, and enhance the competitiveness of the Indian smart watch industry. The specific conditions and timelines associated with the exemptions should be carefully considered by manufacturers seeking to benefit from this policy.
Key Entities Referenced
Customs Act, 1962: An act of parliament of India related to levy of customs duty.
Central Government: The executive authority of the Union of India.
Customs Tariff Act, 1975: An act of parliament of India related to customs tariff.
India: The Republic of India, the country where goods are imported.
Customs Import of Goods at Concessional Rate of Duty Rules, 2017: Rules governing the procedure for availing concessional customs duty rates.
Ministry of Finance: A ministry in the Government of India responsible for financial matters.
Department of Revenue: A department under the Ministry of Finance, Government of India.
New Delhi: Capital of India, place of notification.
रजजस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-डी.एल.-अ.-01022022-233050
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CG-DL-E-01022022-233050
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असाधारण
EXTRAORDINARY
भाग II—खण् ड 3—उप-खण्ड (i)
PART II—Section 3—Sub-section (i)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 85] नई ददल्ली, मगं लिार, फरिरी 1, 2022/माघ 12, 1943
No. 85] NEW DELHI, TUESDAY, FUBRUARY 1, 2022/ MAGHA 12, 1943
जित्त मत्रं ालय
(राजस्ट्ि जिभाग)
अजधसचू ना
नई ददल्ली, 1 फरिरी, 2022
स.ं 11/2022–सीमािल्ु क
सा.का.जन. 85(अ).—केंद्रीय सरकार, सीमािुल्क अजधजनयम, 1962 (1962 का 52) की धारा 25 की
उप-धारा (1) द्वारा प्रदत्त िजियों का प्रयोग करते हुए, यह समाधान हो जाने पर दक ऐसा करना लोकजहत में आिश्यक है,
नीचे दी गई सारणी के स्ट्तंभ (3) में यथा जिजनर्ददष्ट और सीमािुल्क टैररफ अजधजनयम, 1975 (1975 का 51) की प्रथम
अनुसूची के अध्याय या िीर् ष या उपिीर्ष या टैररफ मद के अधीन आन े िाल े ि्णत माल को जो उि सारणी के स्ट्तंभ (2) म ें
तत्सस्ट्थानी प्रजिजष्ट म ें ि्णत दकए गए ह,ैं जब िह भारत म ें आयात दकए जात े ह,ैं उि प्रथम अनुसूची के अधीन उस पर
उद्ग्रहणीय उतने सीमािुल्क स े जजतना उि सारणी के स्ट्तंभ (4) में तत्सस्ट्थानी प्रजिजष्ट म ें यथा जिजनर्ददष्ट मानक दर पर
संगजणत रकम से अजधक ह,ै इस अजधसूचना के उपाबंध में यथा जिजनर्ददष्ट दकन्ही ितों के अध्याधीन, उस ितष संख्या को जो
उि सारणी के स्ट्तंभ (5) म ेंतत्सस्ट्थानी प्रजिष्टी म ेंउजल्लजखत ह,ै छूट दते ी ह ै।
667 GI/2022 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
सारणी
क्र.सं. अध्याय या िीर्ष या माल का जििरण मानक दर ितष सं.
उपिीर्ष या टैररफ मद
(1) (2) (3) (4) (5)
1. 8501 कलाई पर पहने योग्य युजि (जो सामान्यत: स्ट्माटष घडी 10% 1 और 2
के रूप में जानी जाती ह)ै के जिजनमाषण में उपयोग के जलए
कंपन मोटर।
2. कोई अध्याय क्र. सं. 1 में उजल्लजखत मदों के जिजनमाषण में उपयोग के िून्य 1 और 2
जलए इनपुट या पुजे या उप-पुजष।
3. 8507 60 00/ 8507 कलाई पर पहने योग्य युजि (जो सामान्यत: स्ट्माटष घडी िून्य 1 और 3
80 00 के रूप में जानी जाती ह)ै के जिजनमाषण में उपयोग के जलए
5% 1 और 4
बैटरी ।
10% 1 और 5
15% 1 और 6
4. कोई अध्याय क्र. सं. 3 में उजल्लजखत मदों के जिजनमाषण में उपयोग के िून्य 1 और 2
जलए इनपुट या पुजे या उप-पुजष।
5. 8517 79 10 कलाई पर पहने योग्य युजि (जो सामान्यत: स्ट्माटष घडी िून्य 1 और 3
के रूप में जानी जाती ह)ै के जिजनमाषण में उपयोग के जलए
10% 1 और 4
प्रप्रटेड सर्दकट बोडष समुच्चय (पीसीबीए) ।
15% 1 और 5
15% 1 और 6
6. कोई क्र. सं. 5 में उजल्लजखत मदों के जिजनमाषण में उपयोग के िून्य 1 और 2
जलए इनपुट या पुजे या उप-पुजष।
अध्याय
7. 8517 79 90 कलाई पर पहने योग्य युजि (जो सामान्यत: स्ट्माटष घडी िून्य 1 और 3
के रूप में जानी जाती ह)ै के जिजनमाषण में उपयोग के जलए
िून्य 1 और 4
प्रदिष समुच्चय ।
5% 1 और 5
10% 1 और 6
8. कोई अध्याय क्र. सं. 7 में उजल्लजखत मदों के जिजनमाषण में उपयोग के िून्य 1 और 2
जलए इनपुट या पुजे या उप-पुजष।
9. 8544 कलाई पर पहने योग्य युजि (जो सामान्यत: स्ट्माटष घडी िून्य 1 और 3
के रूप में जानी जाती ह)ै के जलए चार्जजग केबल ।
5% 1 और 4
10% 1 और 5
स्ट्पष्टीकरण : इस प्रजिजष्ट के प्रयोजन के जलए कलाई पर
15% 1 और 6
पहने जाने िाले युजि के जलए चार्जजग केबल, यूएसबी
केबल प्रयुि अंत्िष्ट चुंबकीय संयोजजत्र केिल कलाई पर
पहने जाने योग्य युजि के चार्जजग के जलए अनन्यत:
अजभप्रेत ह ै।
10. कोई अध्याय क्र. सं. 9 में उजल्लजखत मदों के जिजनमाषण में उपयोग के िून्य 1 और 2
जलए इनपुट या पुजे या उप-पुजष।[भाग II—खण् ड 3(i)] भारत का राजपत्र : असाधारण 3
11. 39, 73, 85 कलाई पर पहने योग्य युजि (जो सामान्यत: स्ट्माटष घडी िून्य 1 और 3
के रूप में जानी जाती ह)ै के जनम्नजलजखत भाग, घटक और
5% 1 और 4
उपसाधन, अथाषत्: -
10% 1 और 5
(i) घडी डायल अग्र पैनल
15% 1 और 6
(ii) घडी डायल पश्च पैनल
(iii) कुंजी (कजिका भाग)
(iv) कुंजी ताला (कजिका भाग)
(v) स्ट्रैप लॉन्ग साइड (जसजलकॉन या अन्य) सामग्री (ओं)
समायोज्य स्ट्रैप)
(vi) स्ट्रैप िॉटष साइड (जसजलकॉन या अन्य) सामग्री (ओं)
अंतबंधन स्ट्रैप)
(vii) स्ट्रैप कीपर
(viii) अंतबंधन हुक
(ix) बक्कल
(x) बक्कल के जलए संपकष छड
(xi) बक्कल के जलए संपकष छड
(xii) काले कपडे का टेप
(xiii) चालक टेप
(xiv) बायो सेंसर के जलए दोहरी सतह फोम टेप (xv)
पेंच।
12. कोई अध्याय क्र. सं. 11 में उजल्लजखत मदों के जिजनमाणष में उपयोग के िून्य 1 और 2
जलए इनपुट या पुजे या उप-पुजष।
उपाबधं
ितष सं. ित ें
1. यदद आयातक सीमािल्ु क (िुल्क की ररयायती दर पर माल का आयात) जनयम, 2017 में जनर्ददष्ट
प्रदक्रया का पालन करता ह।ै
2. तारीख 1 अप्रलै , 2022 से जिजधमान्य
3. तारीख 1 अप्रलै , 2022 से 31 माच,ष 2023 तक जिजधमान्य
4. तारीख 1 अप्रलै , 2023 से 31 माच,ष 2024 तक जिजधमान्य
5. तारीख 1 अप्रलै , 2024 से 31 माच,ष 2025 तक जिजधमान्य
6. तारीख 1 अप्रलै , 2025 से जिजधमान्य
2. यह अजधसूचना 2 फरिरी, 2022 से प्रिृत्त होगी ।
[फा. सं. 334/01/2022-टीआरयू]
जनजति कनाषटक, अिर सजचि4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 1st February, 2022
No. 11/2022-Customs
G.S.R. 85(E).—In exercise of the powers conferred by sub-section (1) of section 25 of the
Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the
public interest so to do, hereby exempts the goods of the description as specified in column (3) of the Table
below and falling within the Chapter or heading or sub-heading or tariff item of the First Schedule to the
Customs Tariff Act, 1975 (51 of 1975) as are specified in the corresponding entry in column (2) of the said
Table, when imported into India, from so much of the duty of customs leviable thereon under the said First
Schedule as is in excess of the amount calculated at the standard rate as specified in the corresponding entry
in column (4) of the said Table, subject to any of the conditions as specified in the Annexure to this
notification, the Condition No. of which is mentioned in the corresponding entries in column (5) of the said
Table.
TABLE
S.No. Chapter or Description of goods Standard rate Condition
heading or No.
sub-heading or
tariff item
(1) (2) (3) (4) (5)
1. 8501 Vibrator motor for use in manufacture of wrist 10% 1 and 2
wearable devices (commonly known as smart
watches).
2. Any Chapter Inputs or parts or sub-parts for use in Nil 1 and 2
manufacture of items mentioned at S. No. 1.
3. 8507 60 00/ Battery for use in manufacture of wrist wearable Nil 1 and 3
8507 80 00 devices (commonly known as smart watches). 5% 1 and 4
10% 1 and 5
15% 1 and 6
4. Any Chapter Inputs or parts or sub-parts for use in Nil 1 and 2
manufacture of items mentioned at S. No. 3.
5. 8517 79 10 Printed Circuit Board Assembly (PCBA) for use Nil 1 and 3
in manufacture of wrist wearable devices 10% 1 and 4
(commonly known as smart watches).
15% 1 and 5
15% 1 and 6
6. Any Chapter Inputs or parts or sub-parts for use in Nil 1 and 2
manufacture of items mentioned at S. No. 5.
7. 8517 79 90 Display assembly for use in manufacture of Nil 1 and 3
wrist wearable devices (commonly known as Nil 1 and 4
smart watches).
5% 1 and 5
10% 1 and 6
8. Any Chapter Inputs or parts or sub-parts for use in Nil 1 and 2
manufacture of items mentioned at S. No. 7.
9. 8544 Charging cable for wrist wearable devices Nil 1 and 3
(commonly known as smart watches) 5% 1 and 4
10% 1 and 5
Explanation - For the purposes of this entry,
15% 1 and 6
charging cable for wrist wearable devices means[भाग II—खण् ड 3(i)] भारत का राजपत्र : असाधारण 5
a USB cable containing magnetic connector
exclusively used for charging of wrist wearable
devices.
10. Any Chapter Inputs or parts or sub-parts for use in Nil 1 and 2
manufacture of items mentioned at S. No. 9.
11. 39, 73, 85 The following parts, components and Nil 1 and 3
accessories of wrist wearable devices 5% 1 and 4
(commonly known as smart watches), namely: -
10% 1 and 5
(i) Watch dial front panel
15% 1 and 6
(ii) Watch dial back panel
(iii) Key (housing part)
(iv) Key lock (housing part)
(v) Strap long side (silicone or other
material(s) adjustable strap)
(vi) Strap short side (silicone or other
material(s) locking strap)
(vii) Strap keeper
(viii) Locking hook
(ix) Buckle
(x) Link rod for buckle
(xi) Link rod for strap
(xii) Black clothing tape
(xiii) Conductive tape
(xiv) Double sided foam tape for bio sensor
(xv) Screws.
12. Any Chapter Inputs or parts or sub-parts for use in Nil 1 and 2
manufacture of items mentioned at S. No. 11.
ANNEXURE
Condition No. Conditions
1. If the importer follows the procedure specified in the Customs (Import of Goods at
Concessional Rate of Duty) Rules, 2017.
2. Valid from 1st April, 2022 onwards.
3. Valid from 1st April, 2022 upto 31st March, 2023.
4. Valid from 1st April, 2023 upto 31st March, 2024.
5. Valid from 1st April, 2024 upto 31st March, 2025.
6. Valid from 1st April, 2025 onwards.
2. This notification shall come into force on the 2nd day of February, 2022.
[F. No. 334/01/2022-TRU]
NITISH KARNATAK, Under Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.