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DCG confirms customs duty exemption on IT products

Dubai Customs effects duty changes although 1% service charge still applies

Duty exemption on IT products will increase business and the profitability of reseller companies in the Dubai channel, says Rughwani.
Duty exemption on IT products will increase business and the profitability of reseller companies in the Dubai channel, says Rughwani.

The Dubai Computer Group (DCG) has announced the implementation of customs duty exemption on technology products.

The move follows two years of negotiations between the Dubai-based computer association and Dubai Customs.

The changes, which came into effect on 1st January 2012, will see a broad range of IT, consumer electronics and telecommunication products including computers, printers, components, IT accessories and other peripherals exempted from paying customs duty to Dubai Customs.

"We would like to announce the implementation of customs duty exemption on most of the IT products. We also would like to point out to our members and resellers in Dubai that a 1% service charge still applies on all duty exempted products as per the agreement between DCG and Dubai Customs," said Shailendra Rughwani, president of DCG. "I can confirm that the Dubai Customs has already implemented these changes in the Mirsal Systems."

In a statement to the local IT trade industry association, Dubai Customs confirmed that with effect from January, 2012, technological products are exempted from customs duty. However, the revenue authority outlined that a non-refundable service charge of 1% on the cost, insurance and freight (CIF) value of the commodities shall apply, subject to a maximum of AED20, 000 per declaration.

Dubai Customs also outlined that the following interim solutions will be in place in the Mirsal Systems, until the systems are modified to reflect all the changes:

      • > In case of import declarations, a service charge of 1% on their CIF value will be collected without any maximum limit on processing the declaration.
      • > In case the service charge collected is greater than AED20,000 per declaration, the amount collected in excess of AED 20, 000 will be credited back to the CDR account.
      • > In case of payment through ePayment option, a refund cheque will be issued to the client.
      • >In the case of import for re-export declarations, the 5% deposit shall continue to be collected which will be refunded back on the re-exportation of such products.
      • >In case of failure to re-export, only 1% of the deposit will be forfeited and the rest refunded back to the client.
      • >In case of payment understanding guarantee, only 1% service charge will be demanded.

    Rughwani said the DCG would like computer companies operating in Dubai to take advantage of this initiative by the Dubai Government and Dubai Customs. "We are upbeat that this will increase business and profitability of reseller companies in the Dubai channel," he said.