On March 31, 2017 the Central Board of Excise & Customs (CBEC) issued the ‘Notification 26/2017-Cus’ announcing certain amendments in the Customs Act’s Section 46 (2) and Section 47 (3) with an objective to ensure time bound clearance of export and import consignments. The changes have been carried out in the Legislation by enforcing the penal provisions for the trade to follow time bound process.
By endorsing the spirit and intent of those amendments in the existing Legislation, a Representation from the Federation of Freight Forwarders Associations in India (FFFAI), led by Mr Dushyant Mulani, Executive Committee Member & Member of Customs Sub-Committee, FFFAI, met up Mr L. Satya Srinivas, JS (Customs), Government of India on April 24 to discuss and formally submit some recommendations highlighting reality on the ground and plight of consignees/trade people.
As per the changes made in Section 46 (3), filing the Bill of Entry (BoE) should be before the end of the next day, following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station. If the BoE is not filed within the time specified and the proper officer of Customs is satisfied that there was no sufficient cause for such delay, the importer shall be liable to pay charges for late presentation of the BoE at the rate of rupees five thousand per day for the initial three days of default and at the rate of rupees ten thousand per day for each day of default exceeding three days.
Commenting on the new rules pertaining to Section 46 (3) Mr Mulani said, “It is evident from the facts that there are multiple reasons causing delay, which are beyond the control of an importer. To mention a few are: High down time of ICEGATE / EDI system; frequent Breakdown leads to non submission of BoE Delayed filing of IGM by Carriers & Console Agents; lack of collaboration from all stakeholders regarding advance filing; sudden queries received from ICEGATE to re-submit due to technical reasons, etc.”
The amendment made in Section 47 (2) on timely payment of Custom Duty instruct that the importer shall have to make payment of duty on the same day in case of self-assessed BoE and in case of re-assessment or provisional assessment it should be within one day after the return of the BoE.
Reacting to this amendment Mr Mulani pointed out that due to erratic functioning of ICEGATE / EDI system, e-payment module, the importer is unable to make timely payment. On the other hand, non- functioning of e-payment module from 8.30 p.m. to 4.00 a.m. and erratic/slow functioning of ICEGATE, majority of the print outs for e- payments are received late in the evening. Hence the trade is unable to make the payment of Custom Duty on the same day. In addition, mismatch of holidays for Banks and Customs are resulting in late payment of Custom Duty. “Advance Payment of Customs Duty is avoided by importers due to threat of refund arising out of any situation which can lead to double payment of Customs Duty,” Mr Mulani highlighted.
Major Recommendations:
• For generic issues, such as EDI System breakdown, ICEGATE issues, the waiver should be given upfront and immediately
• The present process of taking exemption permission by preparing note sheet for each and every consignments need to be discontinued
• The Carrier and Console Agents should ensure that Amendments in BoE are carried out within few hours of landing and incorporation of such amendments by way of recall / re-assessment should be carried out by the Department on top priority
• Date Validation in the EDI System should be created and IGM / Inward Date details should be captured on real time basis
• For LCL cargo, penalty clause needs to be waived
• There should be strict timelines and guidelines for the Customs officers to carry out assessment and examination within stipulated hours
• Interest on the Bill of Entry should be levied if importer fails to pay the Custom Duty on the next day (working day) instead of present provision of Same Day
• Bank should be instructed to provide custom duty payment on a 24 hours basis
• Custom Duty payment should be insisted only when there is confirmation of physical arrival of goods and other stakeholders such as Shipping Lines , Airlines, Console Agents be sensitised to provide such information instantly upon landing of cargo
• Even information of part landing , Short landing should be provided prior to arrival of cargo by these agencies
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