CA Bimal Jain

CA Bimal Jain

Article disusses amendment in Custom duty carried out /; Proposed  by union budget 2017 related to Amendments in Customs Act, 1962 / Customs Tariff Act, 1975, Legislative changes regarding Authority for Advance Ruling/ Settlement of Cases, Amendments affecting rates of BCD etc.

⇒ Amendments in the Customs Act, 1962 (“the Customs Act”):

♦ Changes in Section 2 of the Customs Act:

Section 2 of the Customs Act contains various definitions.

Section 2 has been amended to:

  • Insert clause (3A) to define a beneficial owner as any person on whose behalf the goods are being imported or exported or who exercises effective control over the goods being imported or exported;
  • Include Foreign Post Office and International Courier Terminal is included in the definition of a Customs Station in clause (13);
  • Omit certain words are omitted in clause (13) to align with the proposed omission of Section 82;
  • Provide that the existing definition of exporter in clause (20) includes the beneficial owner;
  • Provide that the existing definition of importer in clause (26) includes the beneficial owner;
  • Insert clause (30B) so as to define passenger name record information;
  • Define Foreign Post Office and International Courier Terminal.

♦ Changes in Section 7 of the Customs Act:

Section 7 of the Customs Act contains provisions regarding appointment of customs ports, airports etc.

Section 7 has been amended to empower the Board to notify Foreign Post Offices and International Courier Terminals.

Changes in Section 17 of the Customs Act:

Section 17 of the Customs Act contains provisions regarding assessment of duty.

Section 17 has been amended to rationalize the requirement of documents for verification of self assessment.

♦ Changes in Section 27 of the Customs Act:

Section 27 of the Customs Act contains provisions regarding claim for refund of duty.

Sub-section (2) of section 27 has been amended so as to keep outside the ambit of unjust enrichment, the refund of duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made, where-

(i) such excess payment is evident from the bill of entry in the case of self assessed bill of entry or

(ii)   the duty actually payable is reflected in the reassessed bill of entry in the case of reassessment.

Legislative changes regarding Authority for Advance Ruling:

Changes in Section 28E of the Customs Act:

Section 28E of the Customs Act contains various definitions for Advance Ruling.

Clause (e) of Section 28E has been amended so as to substitute the definition of “Authority” to mean the Authority for Advance Ruling as constituted under Section 245-O of the Income Tax Act, 1961.

Changes in Section 28F of the Customs Act:

Section 28F of the Customs Act contains provisions regarding Authority for Advance Rulings.

Section 28F has been amended so as to provide that the Authority for Advance Rulings constituted under Section 245-O of the Income Tax Act, 1961 shall be the Authority for giving advance rulings for the purposes of the Customs Act.

It is further provided that the Member of the Indian Revenue Service (Customs and Central Excise), who is qualified to be a Member of the Board, shall be the revenue Member of the Authority for the purposes of the Customs Act.

It is also provided for transferring the pending applications before the Authority for Advance Rulings (Central Excise, Customs and Service Tax) to the Authority constituted under Section 245-O of the Income Tax Act, 1962 from the stage at which such proceedings stood as on the date on which the Finance Bill, 2017 receives the assent of the President.

Changes in Section 28G of the Customs Act:

Section 28G of the Customs Act provides that no proceeding before, or pronouncement of advance ruling by, the Authority shall be questioned or shall be invalid on the ground merely of the existence of any vacancy or defect in the constitution of the Authority.

Section 28G relating to vacancies not to invalidate proceedings has been omitted.

Changes in Section 28H of the Customs Act:

Section 28H of the Customs Act contains provisions regarding application for Advance Ruling.

Sub-section (3) of Section 28H has been amended so as to increase the application fee for seeking advance ruling from Rs. 2,500/- to Rs. 10,000/- on the lines of the Income Tax Act, 1961.

Changes in Section 28I of the Customs Act:

Section 28I of the Customs Act contains the procedure of Advance Ruling after receipt of application.

Sub-section (6) of Section 28I has been amended so as to extend the existing time limit of 90 days to 6 months by which time the Authority shall pronounce its ruling, on the lines of the Income Tax Act, 1961.

♦ Insertion of Section 30A in the Customs Act:

A new Section 30A has been introduced so as to make it obligatory on the person-in-charge of a conveyance that enters India from any place outside India or any other person as may be specified by the Central Government by notification in the Official Gazette, to deliver to the proper officer the passenger and crew arrival manifest before arrival in the case of an aircraft or a vessel and upon arrival in the case of a vehicle; and passenger name record information of arriving passengers in such form, containing such particulars, in such manner and within such time as may be prescribed. The said section also intends to provide for imposition of a penalty not exceeding Rs. 50,000/- as may be prescribed, in the case of delay in delivering the information.

♦ Insertion of Section 41A in the Customs Act:

A new Section 41A has been introduced so as to make it obligatory on the person-in-charge of a conveyance that departs from India to a place outside India or any other person as may be specified by the Central Government by notification in the Official Gazette, to deliver to the proper officer the passenger and crew departure manifest and passenger name record information of departing passengers before the departure of the conveyance in such form, containing such particulars, in such manner and within such time as may be prescribed. The section also intends to provide for a penalty not exceeding Rs. 50,000/- as may be prescribed in the case of delay in delivering the information.

♦ Changes in Section 46 of the Customs Act:

Section 46 of the Customs Act contains the provisions regarding entry of goods on importation.

Sub-section (3) of Section 46 has been substituted so as to make it mandatory to file the bill of entry before the end of the next day following the day (excluding holidays) on which the vessel or aircraft or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing and to provide for imposition of such charges for late presentation of the bill of entry as may be prescribed.

♦ Changes in Section 47 of the Customs Act:

Section 47 of the Customs Act contains the provisions regarding clearance of goods for home consumption.

Sub-section (2) of Section 47 has been amended so as to provide the manner of payment of duty and interest thereon in the case of self-assessed bills of entry or, as the case may be, assessed, reassessed or provisionally assessed bills of entry.

♦ Changes in Section 49 of the Customs Act:

Section 49 of the Customs Act contains the provisions regarding storage of imported goods in warehouse pending clearance.

Section 49 has been amended to extend the facility of storage under Section 49 to imported goods entered for warehousing before their removal.

♦ Changes in Section 69 of the Customs Act:

Section 69 of the Customs Act contains the provisions regarding clearance of warehoused goods for exportation.

Section 69 has been amended to align it with the proposed omission of Section 82.

♦ Changes in Section 82 of the Customs Act:

Section 82 of the Customs Act contains the provisions regarding label or declaration accompanying goods to be treated as entry.

Section 82 has been omitted.

♦ Changes in Section 84 of the Customs Act:

Section 84 of the Customs Act contains the provisions of regulations regarding goods imported or to be exported by post.

Section 84 has been amended to empower the Board to make regulations to provide for the form and manner in which an entry may be made in respect of goods imported or to be exported by post.

Legislative changes regarding Settlement of Cases:

  • Changes in Section 127B of the Customs Act:

Section 127B of the Customs Act contains the provisions regarding application for settlement of cases.

Section 127B has been amended so as to insert a new sub-section (5) therein to enable any person, other than applicant, referred to in sub-section (1) to make an application to the Settlement Commission.

  • Changes in Section 127C of the Customs Act:

Section 127C of the Customs Act contains the provisions regarding procedure on receipt of an application for settlement of cases

Sub-section (3) of Section 127C has been amended so as to substitute certain words therein. It further seeks to insert a new sub-section (5A) therein to enable the Settlement Commission to amend the order passed by it under sub-section (5), to rectify any error apparent on the face of record.

  • Changes in Section 157 of the Customs Act:

Section 157 of the Customs Act contains the provisions regarding general power to make regulations.

Section 157 has been amended so as to empower Board to make regulations for specifying the form, particulars, manner and time of providing the passenger and crew manifest for arrival and departure and passenger name record information and penalty in the case of delay in delivering the information.

  • Amendments in the Customs Tariff Act, 1975:
  • Changes in Section 9 of the Customs Tariff Act

Section 9 of the Customs Tariff Act contains the provisions regarding Countervailing duty on subsidized articles.

Clause (c) of sub-section (3) of Section 9 has been substituted so as to withdraw the exemption to three categories of non-actionable subsidies specified therein from the scope of anti-subsidy investigations.

  • Amendment in the First Schedule to the Customs Tariff Act, 1975 (“the Customs Tariff Act”):
  1. Amendments not affecting rates of duty:
    • Amendments have been made to:

(i)    Delete tariff items 1302 32 10 and 1302 32 20 and entries relating thereto and create new tariff items 1106 10 10 and 1106 10 90, in relation to Guar meal and its products to harmonize the Customs Tariff with HS Nomenclature.

(ii)   Create new tariff item 1511 90 30 for Refined bleached deodorised palm stearin” to harmonize the Customs Tariff in accordance with WCO classification decision.

(iii) Substitute tariff items 3823 11 11 to 3823 11 90 and entries relating thereto with tariff item 3823 11 00.

(iv) Substitute tariff items 3904 10 10 to 3904 22 90 with tariff items 3904 10 10 to 3904 22 00 in relation to the PVC Resin

  • Chapter Note (4) of Chapter 98 has been amended so as to remove the non-applicability of headings 9803 and 9804 to goods imported through courier service. Also, to amend heading 9804 so as to extend the classification of personal imports by courier, sea, or land under this heading.
  1. Amendments affecting rates of BCD:
S. No. Commodity Rate of duty
From To
1. Cashew nut, roasted, salted or roasted and salted 30% 45%
2. RO membrane element for household type filters 7.5% 10%

The amendments involving increase in the duty rates will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

  • Amendment in the Second Schedule to the Customs Tariff Act:
S. No. Commodity Rate of duty
From To
Amendments affecting rates of Export duty
Ores and concentrates
1. Other aluminium ores and concentrates Nil 30%

The above amendment increasing the export duty rate will come into effect immediately owing to a declaration under the Provisional Collection of Taxes Act, 1931.

 (Author can be reached at Email: bimaljain@hotmail.com)

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