1. Introduction
1.1 Section 146 of the Customs Act, 1962 states that no person shall carry on business as an agent relating to entry or departure of a conveyance or the import or export of goods at any Customs station unless such person holds a licence granted in this behalf in accordance with regulations made in this regard by the Board. Thus, any person desirous to carry on business as a Customs Broker relating to entry or departure of a conveyance or import or export of goods at any Customs station is required to obtain a licence, which is referred to as the Customs Broker licence and the person concerned as the Customs Broker.
1.2 Section 146 of the Customs Act, 1962 read with the Customs Brokers Licensing Regulations (CBLR), 2018 governs the legal and procedural aspects of the grant of Customs Broker licence as well as the obligations and responsibilities of a Customs Broker.
2. Application for Customs Broker licence and eligibility:
2.1 Regulation 4 of CBLR 2018 provides for invitation of applications by National Academy of Customs, Indirect Taxes & Narcotics (NACIN) in the month of April every year for conducting examination and subsequent grant of license to act as Customs Broker in prescribed Form A of CBLR by publication in two leading national daily newspaper in Hindi and English each. The application in Form A along with a fee of five hundred rupees shall be made to Principal Commissioner of Customs or Commissioner of Customs, having jurisdiction over the area where the applicant wants to transact business.
2.2 The eligibility condition as per Regulation 5 of CBLR 2018 is that the applicant should be a citizen of India, a person of sound mind, is not adjudicated as insolvent holds an Aadhaar number, holds a valid PAN card and confirms financial viability by a certificate issued by a scheduled bank or such other proof acceptable to the Principal Commissioner of Customs or Commissioner of Customs evidencing possession of assets of value of not less than Rs.5 lakhs. Further an individual applicant or in case the applicant is a firm, its partner or in the case of a company, its director or an authorized employee who may handle the Customs work, shall be a graduate from a recognized university and possess a professional degree such as Masters or equivalent degree in Accounting, Finance or Management, CA/CS/MBA/LLM/ACMA/FCMA or Diploma in Customs Clearance work from any Institutes or University recognised by the Government or is having at least two years’ experience in transacting Customs Broker work as G-Card holder. The applicant may also be a retired Group A officer from the Indian Revenue Service (Customs and Central Excise) having a minimum of 5 years’ experience in Group A service. Other conditions that need to be fulfilled by the applicant are:
(i) The applicant has neither been convicted by a competent Court for an offence nor any criminal proceeding is pending against him in any Court of law;
(ii) The applicant has not been penalised for any offence under the Act, the Central Excise Act, 1944 (1 of 1944), the Finance Act, 1994(32 of 1994), the Central Goods and Services Act, 2017 Goods and Services Tax Act, 2017 (13 of 2017).
3. Qualifying examinations:
3.1 Any applicant who satisfies the criteria of Regulations 5 of CBLR 2013 and has applied for grant of licence under Regulation 4 shall be required to appear for the written as well as the oral examination conducted by the National Academy of Customs, Indirect Taxes & Narcotics (NACIN).
3.2 The written examination shall be conducted on specified dates in month of January of each year for which intimation shall be sent individually to applicants in advance before the date of examination. The result of the said examination shall be declared by end of May each year. The successful applicant shall be called for an oral examination on specified dates in month of June of each year, the result of which shall be declared in the month of July of each year.
3.3 The applicant shall be required to clear both the written examination as well as corresponding oral examination. An attempt at the written exam shall be deemed to be an attempt and notwithstanding the disqualification/ cancellation of application, the fact of appearance of the applicant at the examination will count as an attempt. Further, an applicant shall be allowed a maximum of six attempts to clear the examination.
3.4 The examination may include questions on the following:
(a) preparation of various kinds of bills of entry, bills of export, shipping bills, and other clearance documents;
(b) arrival entry and clearance of vessels;
(c) tariff classification and rates of duty;
(d) determination of value of imported and export goods;
(e) conversion of currency;
(f) nature and description of documents to be filed with various kinds of bills of entry, shipping bills and other clearance documents;
(g) procedure for assessment and payment of duty including refund of duty paid;
(h) examination of goods at Customs Stations;
(i) prohibitions on import and export;
(j) bonding procedure and clearance from bond;
(k) re-importation and conditions for free re-entry;
(l) drawback and export promotion schemes including the Special Economic Zone scheme;
(m) offences under the Act;
(n) provisions of the allied Acts including the Central Goods and Services Act, 2017 (12 of 2017) and section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Indian Explosives Act, 1884 (4 of 1884), the Destructive Insects and Pests Act 1914 (2 of1914), the Dangerous Drugs Act, 1930 (2 of 1930), the Drugs and Cosmetics Act, 1940 (23 of1940), the Central Excise Act, 1944 (1 of 1944), the Copy Right Act, 1957 (14 of 1957), the Trade and Merchandise Marks Act 1958 (43 of 1958), the Arms Act 1959 (54 of 1959), the Patents Act, 1970 (39 of 1970), the Narcotics Drugs and Psychotropic Substances Act, 1985(61 of 1985), the Environment (Protection) Act, 1986 (29 of 1986), the Foreign Trade (Development and Regulations) Act, 1992 (22 of 1992), the Foreign Exchange Management Act, 1999 (42 of 1999), the Design Act, 2000 (16 of 2000) and the Food Safety and Standard Act, 2006 (No. 34 of 2006) and other laws for the time being in force applicable to EXIM trade and the rules and regulations made under these Acts in so far as they are relevant to clearance of goods through Customs;
(o) provisions of the Prevention of Corruption Act, 1988 (49 of 1998);
(p) procedure for appeal and revision applications under the Act; and
(q) online filing of electronic bills of entry and shipping bills vide the Indian Customs and Central Excise Electronic Commerce or Electronic data interchange gateway (ICEGATE) and Indian Customs Electronic data Interchange System (ICES).
(r) knowledge of regulations, rules, notifications, etc. under the Customs Act and other Allied Acts.
4. Bond for grant of licence:
4.1 The Commissioner of Customs shall, on payment of Rs.5,000/- within two months of the declaration of the results of the oral examination, grant license to an applicant within one month of the payment of the said fee. Such licensed Customs Broker may work in all Customs stations subject to intimation in Form C to the Principal Commissioner or Commissioner of Customs station where he intends to transact business.
4.2 Before granting the licence under the Regulation 7 of CBLR 2018, the Principal Commissioner or Commissioner of Customs shall require the applicant to enter into a bond prescribed in this regard for due observance of these regulations and shall also require to furnish a bank guarantee, or a postal security or National Saving Certificate or a fixed deposit receipt issued by a nationalised bank, in the name of the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, for an amount of Rs.5 lakhs for carrying out the business as a Customs Broker.
5. Validity of licence:
5.1 The licence granted under Regulation 7 shall be valid for a period of 10 years from the date of issue and shall be renewed from time to time if the performance of the licensee is found to be satisfactory with reference, inter alia, to the obligation specified for Customs in CBLR 2018 including absence of instance of any complaints of misconduct. The license can be renewed for a further period of 10 years by Principal Commissioner or Commissioner of Customs on payment of a fee of Rs.15,000/-. In case, the Customs Broker fails to submit the application for renewal before the expiry of the validity of the license, the Principal Commissioner or Commissioner of Customs may after satisfying himself to the genuineness of the reasons of delay, renew the license upon payment of two thousand rupees as late fee by the Customs broker in addition to the fee for renewal within one month of the date of receipt of application. However, a licence granted to a Customs Broker, authorised under the Authorised Economic Operator Programme vide Circular No. 28/2012-Cus., dated 16-11-2012, shall not require renewal till such time the said authorisation is valid.
6. Obligations of Customs Brokers:
6.1 Regulation 11 of the CBLR 2018 casts certain obligations on a Customs Broker. Some of the important obligations enjoin the Customs Broker are to:
(a) obtain an authorisation from each of the companies, firms or individuals by whom he is for the time being employed as Customs Broker and produce such authorisation whenever required by the Assistant/Deputy Commissioner of Customs;
(b) transact business in the Customs Station either personally or through an employee duly approved by the Assistant/Deputy Commissioner of Customs;
(c) not represent a client in any manner to which the Customs Broker , as a former employee of the Central Board of Indirect taxes and Customs gave personal consideration, or as to the facts of which he gained knowledge, while in Government service;
(d) advise his client to comply with the provisions of the Act and in case of non- compliance, shall bring the matter to the notice of the Assistant/Deputy Commissioner of Customs;
(e) exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage;
(f) not withhold information contained in any order, instruction or public notice relating to clearance of cargo or baggage issued by the Commissioner of Customs, from a client who is entitled to such information;
(g) promptly pay over to the Government, when due, sums received for payment of any duty, tax or other debt or obligations owing to the Government and promptly account to his client for funds received for him from the Government or received from him in excess of Governmental or other charges payable in respect of the clearance of cargo or baggage on behalf of the client;
(h) not procure or attempt to procure directly or indirectly, information from the Government records or other Government sources of any kind to which access is not granted by the proper officer;
(i) not attempt to influence the conduct of any official of the Customs Station in any matter pending before such official or his subordinates by the use of threat, false accusation, duress or the offer of any special inducement or promise of advantage or by the bestowing of any gift or favour or other thing of value;
(j) not refuse access to, conceal, remove or destroy the whole or any part of any book, paper or other record, relating to his transactions as a Customs Broker which is sought or may be sought by Principal Commissioner of Customs or Commissioner of Customs;
(k) maintain up to date record such as bill of entry , shipping bill , transhipment application and all correspondences and other papers relating to his business as Customs Broker and also accounts including financial transactions in an orderly and itemized manner as specified by Deputy / Assistant Commissioner of Customs;
(l) immediately report the loss of license to the Principal Commissioner of Customs or Commissioner of Customs;
(m) discharge duty as a Customs Broker with utmost speed and efficiency and without any delay;
(n) verify correctness of Importer Exporter Code (IEC) number, Goods and Services Tax Identification Number (GSTIN),identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information;
(o) Inform any change of postal address, telephone number, e- mail etc. to the Deputy Commissioner / Assistant Commissioner of Customs within 1 month of such change.
(p) maintain all records and accounts that are required to be maintained under CBLR, 2018 and preserve for at least five years and all such records and accounts shall be made available at any time for the inspection of officers authorised for this purpose; and
(q) co-operate with the Customs authorities and shall join investigations promptly in the event of an inquiry against them or their employees.
7. Suspension, revocation of licence or imposition of penalty:
7.1 The Principal Commissioner or Commissioner of Customs may revoke the licence of a Customs Broker and order for forfeiture of part or whole of security, or impose penalty not exceeding Rs.50,000 on him on any of the following grounds:
(a) failure of to comply with any of the conditions of the bond executed by him;
(b) failure to comply with any of the provisions of the regulations;
(c) committing any misconduct, which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station;
(d) adjudicated as an insolvent;
(e) becomes of unsound mind; and
(f) has been convicted by a competent court for an offence involving moral turpitude or otherwise.
7.2 The Principal Commissioner or Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs Broker where an enquiry against such agent is pending or contemplated. In such case, the Principal Commissioner or Commissioner of Customs shall, within 15 days from the date of such suspension, give an opportunity of hearing to the Customs Broker concerned and then pass an order either revoking the suspension or continuing it, within 15 days from the date of hearing.
7.3 The Principal Commissioner or Commissioner of Customs shall issue a written notice to the Customs Broker within 90 days from the date of receipt of an offence report, stating the grounds on which it is proposed to revoke the licence or impose penalty and require the said Customs Broker to submit within 30 days to a nominated Deputy / Assistant Commissioner of Customs a written statement of defence and also to specify in the said statement whether the Customs Broker desires a personal hearing by the said Deputy / Assistant Commissioner of Customs. Thereafter, the Commissioner of Customs may direct the Deputy / Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs Broker. At the conclusion of the inquiry, the Deputy / Assistant Commissioner of Customs shall submit the enquiry report within 90 days from the date of issue of the notice.
7.4 The Principal Commissioner or Commissioner of Customs shall furnish to the Customs Broker a copy of the enquiry report requires him to submit any representation within 30 days. After considering the enquiry report and the representation, if any, the Principal Commissioner or Commissioner of Customs shall pass orders either revoking the suspension of the license or revoking the licence of the Customs Broker or imposing penalty within 90 days from the date of submission of the enquiry report. Order for revoking the license shall not be passed unless an opportunity is given to the Customs Broker to be heard in person by the Principal Commissioner or Commissioner of Customs. An appeal against the order would lie to the Customs, Central Excise and Service Tax Appellate Tribunal.
7.5 Imposition of penalty or any action taken under the CBLR 2018 is without prejudice to the action that may be taken against the Customs Broker or his employee under the provisions of the Customs Act, 1962 or any other law for the time being in force. [Refer Notification No. 41/2018-Cus(N.T.), dated 14-05-2018]
8. Surrender of License:
(1) A licensee may surrender the license granted under Customs House Agents Licensing Regulations, 1984, the Customs House Agents Licensing Regulations, 2004, the Customs Brokers Licensing Regulations, 2013 or the Customs Brokers Licensing Regulations, 2018 through a written request to the Principal Commissioner of Customs or Commissioner of Customs who has issued the license, as the case may be.
(2) On receipt of the request under sub-regulation (1), the Principal Commissioner of Customs or Commissioner of Customs may revoke the license if, (a) the licensee has paid all dues payable to the Central Government under the provisions of the Act, rules or regulations made thereunder; and (b) no proceedings are pending against the licensee under the Act or the rules or regulations made thereunder.
9. Period of validity of a license:
(1) A license granted under Customs House Agents Licensing Regulations, 1984, the Customs House Agents Licensing Regulations, 2004, the Customs Brokers Licensing Regulations, 2013 or the Customs Brokers Licensing Regulations, 2018 shall be valid unless and until revoked in terms of provisions under sub-regulation (2) of regulation 8A or regulation 14.
(2) Notwithstanding anything contained above, the license shall be deemed invalid, if the licensee is found to be inactive for a period of one year.
[Refer Notification No. 62/2021-Customs (NT) dated 23.07.2021]
Source – Custom Duty Manual 2023
