Electronic Cash Ledger (ECL) mandatory with effect from 01 April 2023

The Central Board of Indirect Taxes and Customs (CBIC), issued a Circular No. 09/2023 – Customs, dated 30 March 2023 to clarify on phased implementation of Electronic Cash Ledger (ECL) with effect from 01 April 2023.

Salient features of the ECL and clarifications made thereto, are reproduced as under:

Legal Background:

• Notified under Section 51A of the Customs Act, 1962 which was further regulated vide the Customs (Electronic Cash Ledger) Regulations, 2022 (Notification No. 20/2022-Customs (N.T.)).
• Statutory provisions made effective from 01 June 2022 however, for non-availability of IT platform, applicability exempted till 31 March 2023.

Implementation:

Phase – 1: 01 April 2023 till 30 April 2023 : exemption to deposit to the following:

• Deposits with respect to Goods imported or exported in Customs stations where Customs Automated System is not in place;
• Deposits with respect to Accompanied baggage;
• Deposits with respect to Goods imported or exported at International Courier Terminals;
• Deposits, other than those used for making electronic payment of:
  • any duty of customs, including cesses and surcharges levied as duties of customs;
  • integrated tax;
  • Goods and Service Tax Compensation Cess;
  • interest, penalty, fees or any other amount payable under the Act, or Customs Tariff Act

As above refers to the term “electronic”, the payment made through TR-6 challan for various purposes through authorized bank counter at the Customs locations would be exempted.

Phase – 2: From 01 May 2023: Exemptions cited above would continue, except for the deposits with respect to goods imported or exported at International Courier Terminals

After introduction of Phase 2, major functionalities as listed in Circular shall be developed in ECL.

Registration: Person needs to register on ICEGATE and to create ECL account to make deposits. Detailed process for registration to be provided on ICEGATE portal.

Below entities can register for ECL Account:

• Importers and Exporters;
• Customs Brokers / couriers, making payment on behalf of Importer / Exporter;
• importers who are assigned Unique Identification Number (UIN) under GST

Deposits and payment of liability using ECL:

• A deposit challan to be generated on portal, and deposit to be made in ECL using the authorised payment (internet banking / NEFT / RTGS) from specified banks;
• Amount deposited shall be visible on the ECL.
• Payment from ECL can be done using Payment Challan generated at ICES / ECCS or other applications;
• Functionality to make payment without first depositing in ECL, using Internet Banking / NEFT / RTGS function is also made available;

Refund of balance in ECL: Refund of un-utilized balance in ECL can be applied on ICEGATE portal;

This shows the clear efforts and intention of the Government Authorities toward digitization and ease of doing business.