Rules 25 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Duty is of little use if it can be avoided by a small change in how goods reach India. Rules 25 to 28 deal with that. Rule 25 defines circumvention and lists the practices it includes; rule 26 sets how an investigation starts and how long it may run; rule 27 sets out what the designated authority may recommend and what the Central Government may do; rule 28 provides for review.
This article reads the rules as amended up to the CBIC text dated 1 February 2021 (no amending notification found in CBIC's 2023-2026 lists; 2021-2022 not re-checked). Later notifications should be checked before you rely on the current text.
Circumvention is a change in the pattern of trade caused by a practice, process or work with insufficient cause or economic justification other than the duty, where there is evidence of injury or undermined remedial effect and of dumping. Rule 25(2) lists assembly in India or elsewhere (with a value addition of less than 35% of manufacturing cost), altering the article, routing through unlisted exporters or countries, and any other manner. An investigation must be concluded within 12 months, and in no case more than 18 months.
Rule 25: what circumvention means
Rule 25 is printed with a head showing two substitution marks; it was inserted by Notification No. 6/2012-Cus. (N.T.) dated 19-1-2012 and substituted by Notification No. 9/2020-Cus. (N.T.) dated 2-2-2020.
The definition (rule 25(1))
Circumvention is a change in the pattern of trade between any country and India, or between individual companies in any country subject to the measure and India, as a result of a practice, process or work for which there is insufficient cause or economic justification other than the imposition of the duty. It also requires evidence of injury or that the remedial effects of the duty are being undermined in prices or quantities or both of the like product, and evidence of dumping relative to the normal values previously established, if necessary with appropriate changes or adjustments or in accordance with rule 10.
The practices listed (rule 25(2))
| Clause | Practice | Test as printed |
|---|---|---|
| (a) | Importing the article unassembled, unfinished or incomplete and assembling or finishing it in India or another country | Circumvention if (i) the operation started or increased after, or just prior to, the investigation and parts come from the notified country, and (ii) value added during assembly or completion is less than 35% of manufacturing cost |
| (b) | Altering description, name or composition after processing | Circumvention if the alteration results in the article changed in form or appearance even in minor forms, regardless of any variation in tariff classification |
| (c) | Exporting through an exporter, producer or country not subject to duty | Circumvention if the notified exporters or producers change their trade practice, patterns of trade or channels of sales to export through others |
| (d) | Any other manner | Whereby the duty imposed is rendered ineffective |
The assembly test in detail
For clause (a)(ii), a proviso says that in calculating value addition, expenses on procuring technology (patents, copyright, trademark, royalty, technical know-how, consultancy charges) are not included in the value of the parts brought in. Explanation I defines "value" as the cost of the assembled, complete or finished article less the value of imported parts or components. Explanation II repeats that payments relating to intellectual property rights, royalty, technical know-how fees and consultancy charges are not taken into account in calculating value.
An example: Cobalt Appliances starts, soon after an investigation begins, importing parts of a duty-affected product from the notified country and assembling the finished product in India. If the value added in India is less than 35% of manufacturing cost under the printed formula, and the other elements are met, rule 25(2)(a) treats the assembly as circumvention.
Rule 26: starting the investigation
| Sub-rule | Provision |
|---|---|
| 26(1) | On a written application by or on behalf of the domestic industry |
| 26(2) | The application must, inter alia, contain sufficient evidence of the circumstances that justify initiation |
| 26(3) | Suo motu initiation if satisfied from information from the Commissioner of Customs under the Customs Act, 1962 or any other source |
| 26(4) | The authority may initiate where satisfied that imports of the article circumventing the duty are found to be dumped |
| Proviso to 26(4) | The authority notifies the government of the exporting country before initiating |
| 26(4A) | Inserted with effect from 2-2-2021 by Notification No. 10/2021: the Central Government may, on the authority's recommendation, resort to provisional assessment of imports alleged to be circumventing and ask a guarantee from the importer, until it takes a decision under rule 27(3) |
| 26(5) | The rule 6 evidence and procedures apply mutatis mutandis |
| 26(6) | The investigation is concluded within 12 months and in no case more than 18 months of initiation, for reasons recorded in writing |
Rule 26(4A) is printed within sub-rule (4) before the proviso; sub-rule (4A) refers to "sub-rule (3) of rule 27".
Because rule 6 applies, parties receive public notice and information requests as in an ordinary investigation; see our article on Rules 5 to 9.
Rule 27: determining circumvention
Under rule 27(1), if the designated authority determines that circumvention exists, it may recommend imposition of duty on imports of articles found to be circumventing an existing duty, or on imports of the article originating in or exported from countries other than those already notified, and the levy may apply retrospectively from the date of initiation of the rule 26 investigation. Rule 27(2): it issues a public notice recording its findings. Rule 27(3): the Central Government may, on the authority's recommendations, extend the duty to imports of the article, including from the date of initiation of the rule 26 investigation or such date as the authority recommends.
Rule 28: review of circumvention
Rule 28(1): the authority may review the need for continued imposition of the duty, where warranted, on its own initiative or, after a reasonable period since the measures, on request of an interested party submitting positive information substantiating the need. Rule 28(2): a review is concluded within twelve months from initiation. A proviso, inserted with effect from 1-7-2021 by Notification No. 10/2021, says it is completed at least three months before expiry of the duty under review.
For the five-year life of the underlying duty and the ordinary review, see Rules 22 to 24. The corresponding CVD provisions are in our article on CVD rules 24 to 31. The anti-dumping text here has no anti-absorption rules.
Who should take note
| Reader | Why it matters |
|---|---|
| Importers who assemble locally | Test value addition against the 35% rule and keep manufacturing cost records |
| Traders routing through other countries | Rule 25(2)(c) looks at changes in trade practice by notified exporters |
| Producers | Use rule 26(2) evidence rules to support an application |
| Exporters | The authority must notify the exporting country's government before initiating |
If a circumvention application or investigation concerns you, our legal dispute resolution team can help.
Need help with circumvention?
Anti-circumvention cases turn on documents: costing for the value addition test, trade-pattern data and product descriptions. Our legal dispute resolution team can review these records before an application is filed or a response is made.
Key takeaways
- Circumvention needs a change in trade pattern, insufficient cause other than the duty, and evidence of injury or undermined remedy plus dumping.
- The assembly test: operation started or increased around the investigation, parts from the notified country and value addition below 35% of manufacturing cost.
- Even minor alterations in form or appearance can count under clause (b), whatever the tariff classification.
- Provisional assessment with a guarantee is possible during an investigation.
- Investigations conclude within 12 months, and in no case more than 18 months.
- The duty may be extended retrospectively from the date of initiation.
Read next
- Rules 22-24: new shipper, sunset review and third-country dumping
- CVD rules 24-31: review, circumvention and anti-absorption
- Anti-dumping duty levy and process
- Safeguard and countervailing duty explained
Disclaimer: Based on the Customs Tariff Act rules named above as published on the CBIC Tax Information Portal or in the Gazette, as consulted on 3 October 2026. Later notifications, duty notifications and the Customs Tariff Act, 1975 should be checked. This article is general information, not legal advice; check the official text before acting.