1. Introduction:
1.1 The Finance Act, 2011 introduced self-assessment under which importers and exporters are mandatorily required to self-assess the duty in terms of Section 17 of the Customs Act, 1962. This self-assessment is subject to verification by the proper officer of the Customs and may lead to reassessment by the proper officer of Customs if it is found to be incorrect. However, in terms of Section 17(1) of the Customs Act, 1962 in case an importer or exporter is not able to make selfassessment, he may, request in writing to the proper officer for assessment. Also, in terms of Section 18 of the Customs Act, 1962, in case, the proper officer is not able to verify the selfassessment or make re- assessment of duty or he deems it necessary to subject any imported or export goods to any chemical or other tests or where necessary documents have not been produced or information has not been furnished and it is necessary to make further enquiry, he may direct that the duty leviable on such goods be assessed provisionally.
2. Conditions for provisional assessment:
2.1 For making provisional assessment the proper officer is required to estimate the duty to be levied i.e. the provisional duty. Wherever, duty is to be assessed provisionally, in terms of section 18, the importer or exporter shall:
(a) for the purposes of undertaking to pay on demand the deficiency, if any, between the duty as may be finally assessed or re-assessed and the duty provisionally assessed, execute a bond, in the prescribed form and;
(b) furnish such security for the payment of duty deficiency as prescribed.
2.2 The security to be obtained shall be in the form of bank guarantee or a cash deposit, as convenient to the importer.
2.3 CBIC has issued comprehensive guidelines for provisional assessment vide Circular No. 38/2016-Customs dated 22.08.2016. This circular has been revised after the implementation of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (referred to as the CAROTAR, 2020) issued vide Notification No. 81/2020-Customs (N.T.) dated 21st August, 2020. The latest standing CBIC Circular prescribing guidelines for provisional assessment are provided in Circular 19/2021Customs dated 16.08.2021.
3. Finalization of provisional assessment:
3.1 The assessments should be finalized expeditiously. Customs (Finalisation of Provisional Assessment) Regulations, 2018, have been notified on 14.8.2018 to prescribe the timelines and manner for finalization of provisional assessments. However, in cases involving project imports, assessments should be finalized as per Project Import Regulations, 1986 as amended.
[Refer Clarification issued vide F. No. 353/91/74-Cus dated 28.01.1977; Instructions F.No.511/7/77-Cus.VI, dated 9-I-1978; Project Import Regulations, 1986; Circular No.38/2016 dated 22.08.2016 as amended by Circular 42/2020 dated 29-09-2020 and Circular 19/2021 dated 16-08-2021; Customs (Finalisation of Provisional Assessment) Regulations, 2018; [Customs (Provisional Duty Assessment) Regulations, 2011, rescinded by Notification No. 113/2016-Cus (N.T.) dated 22.08.2016]
Source – Custom Duty Manual 2023
