IGCR Scheme: Complete Guide to Eligibility Criteria and Compliance Requirements for Importers in India
The Import of Goods at Concessional Rate of Duty or for Specified End Use (IGCR) Rules, 2022, notified by the Central Board of Indirect Taxes and Customs (CBIC), allow importers to bring goods into India at a reduced or nil customs duty rate provided the goods are used strictly for the purpose declared at the time of import and as per the relevant exemption notification. While the concessional rate is attractive, availing this benefit is conditional, not automatic. Importers must satisfy a defined set of procedural and substantive criteria throughout the import lifecycle not just at the point of clearance.
This guide breaks down the essential criteria businesses must follow to properly avail and sustain IGCR benefits.
1. Eligible Importer and End-Use Declaration
The benefit is available only to an importer who intends to use the imported goods for:
Manufacture of goods, or
Rendering an output service (excluding after sales service), or
A specified end use as defined under the relevant exemption notification
Therefore, the importer must be clear on which category applies, since this determines the compliance trail that follows including how utilisation is eventually proven.
2. One-Time Prior Intimation (Form IGCR-1)
Before importing any goods under a concessional notification, the importer must file a one-time intimation in Form IGCR-1 on the common portal (ICEGATE), providing details such as:
Name and address of the importer (and job worker, if applicable)
Nature of goods to be imported and the manufacturing/service process involved
Estimated quantity and value of goods
The relevant exemption notification and serial number
Once filed, the system generates an Import Identification Number (IIN), which can then be used for multiple imports going forward there's no need to repeat this filing for every shipment.
3. Continuity Bond AND Bank Guarantee — Two Separate but Linked Requirements
A common point of confusion: importers assume they only need either a bond or a bank guarantee. Under IGCR, both are required — a continuity bond is mandatory for every importer, and a bank guarantee/cash security/surety is furnished in addition, with the exact quantum depending on the importer's risk category (Circular No. 18/2022- Customs)
3.1 The Continuity Bond — how the amount is calculated
Exemption-type notifications: Bond value = the difference between the standard duty applicable and the concessional duty being availed (i.e., the duty foregone), with an undertaking to pay interest if the goods are ultimately not used for the declared purpose
Non-exemption notifications: Bond value = the full assessable value of the goods being imported
This bond amount is debited against each import and re-credited once utilisation is proved through the periodic statement (Form IGCR-3).
3.2 The Bank Guarantee/Cash Security/Surety — category-based norms
While the bond secures the duty liability, customs additionally requires a bank guarantee, cash security, or surety as a further layer of protection — but the extent required is not uniform. It's scaled to the importer's risk profile:
Importer Category | BG/Cash Security/Surety Required |
Central/State Government departments, Union Territories, PSUs, or autonomous institutions under such governments | Nil BG/cash security; surety not required |
Authorized Economic Operators (AEOs) | Nil BG/cash security; surety not required |
Nominated agencies importing gold under the India-UAE CEPA | Nil BG/cash security; surety not required |
Designated RBI-nominated banks and PSUs importing under Notification No. 56/2000-Cus or 57/2000-Cus | Nil BG/cash security; surety not required — subject to conditions as given in the relevant circular. |
GST-registered manufacturers/service providers with a clean GST return filing record and annual turnover above ₹1 crore in the preceding year | Surety for the full duty-foregone amount; if surety cannot be provided, a BG/cash security of up to 5% of the bond debit value instead |
All other importers (not falling in any category above) | BG/cash security of up to 25% of the bond debit value |
Bond debit value = the duty foregone (for concessional-rate cases) or the assessable value of the goods (for other cases)
4. Timely Utilisation of Imported Goods
Goods must be put to the declared use within the time limit specified in the relevant notification, or, where no timeline is prescribed, within the statutory window set by the IGCR Rules, currently one year from the date of import (following the 2025 amendment), extendable further by the jurisdictional Commissioner on justified grounds.
Failure to use goods within this window doesn't automatically mean penalty but it does trigger an obligation to either re-export the goods or clear them on payment of duty and interest.
5. Maintenance of Proper Records
Importers must maintain a detailed account showing:
Quantity and value of goods imported
Date of receipt at the relevant premises
Quantity consumed for the declared purpose
Goods sent for job work (and nature of job work carried out)
Goods received back after job work
Goods re-exported, if any
Goods remaining in stock
These records must be linked to the corresponding Bills of Entry and made available for verification whenever required by customs authorities.
6. Periodic Statement Filing (Form IGCR-3)
Importers must file a periodic statement on the common portal — recording utilisation, bond debits/credits, job work movements, re-exports, and any duty-paid clearances during the period. Following the Customs (IGCR) Amendment Rules, 2025 (Notification No. 07/2025-Customs (N.T.), effective 2 February 2025), this filing frequency was changed from monthly to quarterly, easing the compliance burden for regular importers.
Timely and accurate filing is what allows the bond to be re-credited.
7. Job Work Compliance (Where Applicable)
Where imported goods are sent out for job work, importers must ensure the job work arrangement and process are properly documented
8. Handling Unutilised or Defective Goods
If goods cannot be used as declared — surplus, defective, or the intended use falls through, the importer has two compliant options:
Re-export the goods (recorded in the periodic statement, with re-export value not less than the import value), or
Voluntarily clear them for home consumption, paying the applicable duty along with interest through the common portal
For capital goods genuinely put to use before disposal, duty is payable only on the depreciated value (calculated on a prescribed straight-line basis), rather than the full original value
10. Continued Compliance Until Final Utilisation Reporting
IGCR compliance does not end at customs clearance. The obligation continues until the goods are actually put to the declared use (or supplied to the end-use recipient) and this is reflected in the periodic statement — making IGCR a continuing compliance exercise.
Conclusion
The IGCR framework offers genuine duty savings, but the benefit is conditional on disciplined, continuous compliance from the initial IGCR-1 intimation to quaterly reporting and bond/bank guarantee obligations.
Notably, IGCR and MOOWR can be availed together, allowing eligible businesses to stack duty benefits under both schemes — read our blog on MOOWR-IGCR interplay to know more, or set up a call with us to see if your business is eligible
Need help setting up or auditing your IGCR compliance process?- Your Trusted IGCR Consultant, Commercial Consultancy Counsel (CCC) specializes in Foreign Trade Policy, Customs law, and DGFT compliance advisory — reach out to discuss your import structure.
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