Implementation of ‘Self-Assessment' in Customs - Board's Clarifications
FINANCE Bill, 2011 stipulates ‘Self-Assessment' of Customs duty in respect of imported and export goods by the importer or exporter, as the case may be. As per the new scheme, while the responsibility for assessment would be shifted to the importer / exporter, the Customs officers would have the power to verify such assessments and make re-assessment, where warranted. Board directs that the new legislative provisions are carefully studied and applied correctly to ensure that there is no disruption in the assessment work, and clearance of imported and export goods continues smoothly.
Salient features of the self assessment scheme:
The new Section 17 of the Customs Act, 1962 provides for self-assessment of duty on imported and export goods by the importer or exporter himself by filing a Bill of Entry or Shipping Bill, as the case may be, in the electronic form (new Section 46 or 50). The importer or exporter at the time of self-assessment will ensure that he declares the correct classification, applicable rate of duty, value and benefit of exemption notifications claimed, if any, in respect of the import / export goods while presenting Bill of Entry or Shipping Bill.
Important changes are also made in Section 46 of the Customs Act, 1962 whereby it has been made mandatory for the importer to make entry for the imported goods by presenting a Bill of Entry electronically to the proper officer except for the cases where it is not feasible to make such entry electronically. While this is not a new requirement, it provides a legal basis for electronic filing. Where it is not feasible to file these documents in the System, the concerned Commissioner can allow filing of Bill of Entry in manual mode by the importer. These Bills of Entry would continue to be regulated by Bill of Entry (Forms) Regulations, 1976. Interestingly, in the circular, for imported goods, the concerned Commissioner can allow manual filing of Bill of Entry while, for export, Commissioner concerned, can allow manual filing of shipping bill. Maybe for exports the Commissioner does not show as much concern as he does for imports!
Under the new scheme of self-assessment, the Bill of Entry or Shipping Bill that is self-assessed by importer or exporter, as the case may be, may be subject to verification with regard to correctness of classification, value, rate of duty, exemption notification or any other relevant particular having bearing on correct assessment of duty on imported or export goods. Such verification will be done selectively on the basis of the output of the Risk Management System (RMS), which not only provides assured facilitation to those importers having a good track record of compliance but ensures that on the basis of certain rules, intervention, etc. high risk consignments are interdicted for detailed verification before clearance.
One of the important features of this scheme is that verification of declarations and assessment done by the importer or exporter, except for cases wherein a speaking order has been passed by the proper officer while re-assessing the duty, can also be done at the premises of the importer or exporter. This provision will be applicable as a part of an ‘On Site Post Clearance Audit' (PCA) programme, which is likely to be implemented soon. Suitable legal cover has been provided vide Section 17 and Section 157 of the Customs Act, 1962. The programme is being developed and detailed instructions will follow in due course. Till that time, the current Post Clearance Audit will continue.
In cases, where the importer or exporter is not able to determine the duty liability / make assessment for any reason, except in cases where examination is requested by the importer under proviso to sub-section (1) of Section 46, a request shall be made to the proper officer for assessment of the same under Section 18(a) of the Customs Act, 1962. In this situation an option is available to the proper officer of Customs to resort to provisional assessment of duty by asking the importer / exporter to furnish security as deemed fit by the proper officer for differential duty equal to duty provisionally assessed and duty finally payable after assessment. In this regard, it is clarified that importer should not resort to this provision in a routine manner and it is expected that this would be done in deserving cases only where importer or exporter is not able to assess the goods for duty for want of certain information / documents etc.
Hence, in both the cases where no self-assessment is done and when self-assessment is done and reassessment is required under Section 17, the importer or exporter can opt for provisional assessment of duty by the proper officer of Customs. The difference is that when no self-assessment is done, the provisional assessment shall get converted into final assessment and when self-assessment is done, the provisional assessment shall get converted into re-assessment. Consequential changes are being made in the Customs (Provisional Duty Assessment) Regulations, 1963.
Effective Date:
The aforementioned changes will come into effect when the Finance Bill is enacted. Board clarifies that all Bills of Entry or Shipping Bills which have been presented either electronically or manually before the date of enactment of the Finance Bill shall be governed by provisions of erstwhile Section 17 or Section 18 of the Customs Act, 1962. (It may be noted that Finance Bill, 2011 was enacted on 08.04.2011 and these provisions have come into effect from that day itself.)
Circular No., Dated: 8th April, 2011.