On September 6, 2023, the Central Board of Indirect Taxes & Customs (CBIC) of the Ministry of Finance, Government of India, released Instruction No. 27/2023-Customs. The communication was primarily focused on revising the processes and procedures surrounding the Customs Post Clearance Audit (PCA). This article aims to shed light on the essential amendments and what they mean for stakeholders involved.
Amendment to Para 3.2.1: Scope and Coverage
The entire lot of Importer Exporter Codes (IECs) will be examined for selection in Premised Based Audit (PBA). The National Customs Targeting Centre (NCTC), Mumbai, will determine the risk parameters, which will evolve over time. This implies a more dynamic risk-assessment model that adapts to new information and feedback.
Amendment to Para 3.2.2: Selection of Premises
This amendment standardizes the process of selecting entities for audits. A committee will be set up for this purpose, including representation from various bodies. This committee will meet annually to finalize the list of auditees for the next financial year.
Deletion of Para 2.4
The specific content of Para 2.4 was not provided, but its deletion may signify a streamlining of the previous instructions, possibly removing redundant or obsolete information.
Amendment to Para 3.3.1: Selection of Themes
This paragraph introduces the concept of theme-based audits (ThBA), for which the selection process is now formalized. A committee will meet biannually to decide the themes for the first and second halves of the financial year.
Revision of Formats
The amendment introduces new MIS report formats, giving a structured approach to capturing data during audits.
Amendment to Paras 3.8.2. (iv) (a) & (b)
The amendments emphasize the roles of various committees in decision-making processes, which are now clearly outlined.
Conclusion
Instruction No. 27/2023-Customs brings forth several crucial changes to the Customs PCA work. It emphasizes risk-based assessment, a more standardized selection process for audits, and the introduction of theme-based audits. Moreover, it provides new MIS report formats and clarifies the roles and functions of various committees involved in the PCA process. These changes aim to streamline and optimize the functioning of the Customs audit mechanisms, and all officers are advised to get acquainted with these amendments.
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Instruction No. 27/2023- Customs
F. No. CBIC-21/138/2023-INV-CUSTOMS-CBIC
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes & Customs
(Investigation- Customs)
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10th floor, Tower-2, Jeevan Bharti Building
124 Connaught Circus (Near Janpath)
New Delhi- 110001
Email ID: inv-customs@gov.in
Date: 06.09.2023
To,
All the Principal Chief Commissioners/Chief Commissioners of Customs/ Customs (Preventive),
All the Principal Chief Commissioners/ Chief Commissioners of CGST and Customs,
The Principal Director General, Directorate General of Systems & Data Management,
The Principal Director General, Directorate General of Revenue Intelligence, The Director General, Directorate General of Analytics & Risk Management, The Director General, Directorate General of Audit,
The Commissioner, Public Accounts Committee (PAC),
The Commissioner, Directorate of Data Management,
The Webmaster, CBIC.
Madam/Sir,
Subject: Streamlining of Customs Post Clearance Audit (PCA) Work-Instructions-reg.
The undersigned is directed to draw your kind attention to the Instruction No. 02/ 2021-Customs dated 16.02.2021 regarding Customs Post Clearance Audit (PCA).
2. A Meeting to review the performance of Customs PCA was taken by the Chairman, CBIC on 10.03.2023 and based on the decisions taken during the Meeting, Board has decided to make following amendments to the Instruction No. 02/ 2021-Customs dated 16.02.2021
(i) Para 3.2.1. to be substituted with the following Para:-
“3.2.1. The Scope and Coverage: The entire lot of IECs should be taken up for selecting entities for Premised Based Audit (PBA) as per risk-parameters to be decided by the National Customs Targeting Centre (NCTC), Mumbai in consultation with the committee formed as per Para 3.2.2 of these instructions. The risk parameters will be dynamic in nature and would keep on evolving as per feedback received and additional information available. The number of entities to be selected for audit during a financial year is to be calculated as per the capacity to conduct audits as informed by the Audit Commissionerates and finally decided by the committee.”
(ii) Para 3.2.2. to be substituted with the following Para:-
“3.2.2. Selection of Premises: The DG Audit shall prepare the list of auditees for PBA in consultation with the DGARM. For this purpose, a committee headed by the DG Audit consisting of all the Commissioners of Customs (Audit), representative from DRI HQ and the Principal ADG/ADG, NCTC, Mumbai shall meet in February every year to finalise the list of auditees for PBA for the next financial year, and thereafter as felt necessary. The final list shall be communicated to the Audit Commissionerates before 31′ March. The Audit Commissionerates shall plan PBA for the year in such a way that the number of auditees is evenly spread in all the months and all selected entities are audited. It must be ensured that every entity selected should be subjected to the full audit cycle starting from Desk Review, Audit Plan, Audit Verification and preparation of Audit Report.”
(iii) Para 2.4. deleted.
(iv) Para 3.3.1. to be substituted with the following Para:-
“3.3.1. Selection of themes: The DG Audit shall convene half yearly meetings of the committee consisting of all the Principal Chief Commissioners/ Chief Commissioners in charge of Customs (Audit) Commissionerates; the Principal ADG/ ADG, NCTC, Mumbai and a representative from DRI HQ (not below the rank of Director). The committee shall meet in January and July to select the themes for ThBA for the first and second halves respectively for each financial year.”
(v) Revision of formats of MIS reports given at Para 3.4: The revised formats for CUS PCA1, CUS PCA-2, CUS PCA-3, and CUS PCA-4 are given at Annexures I, II, III and IV
(vi) Paras 3.8.2. (iv) (a) & (b) to be substituted with the following Paras:-
“a) Committee headed by DG Audit, consisting of all the Principal Chief Commissioners/ Chief Commissioners in charge of Customs (Audit) Commissionerates; the Principal ADG/ ADG, NCTC, Mumbai and a representative from DRI HQ (not below the rank of Director) which meets in January and July to select the themes for ThBA for the first and second halves respectively for each financial year,
b) Committee headed by DG Audit, consisting of all the Commissioners of Customs (Audit), representative from DRI HQ and the Principal ADG/ADG, NCTC, Mumbai which meets in February every year to finalise list of auditees for PBA for the next financial year, and thereafter as felt necessary,”
3. The Instruction No. 02/ 2021-Customs dated 16.02.2021 stands modified to this effect. All the officers under your jurisdiction may be sensitized about these amendments.
4. Difficulties, if any, in implementation of the aforesaid amendments may be brought to the notice of the Board.
Encl: As above
Yours sincerely,
(Shweta Garg)
Deputy Commissioner (Investigation-Customs),
CBIC, New Delhi.
