Customs Audit At the premises of Importer/Exporter – Will CAG Lag Behind?
IN Customs, unlike in Central Excise and Service Tax, audit by Departmental officers is not done in the premises of the importers or exporters. This is past tense. Finance Act 2011 substituted Section 17 of the Customs Act to provide for ‘self assessment'. The newly inserted Section 17(6) stipulates, “Where re-assessment has not been done or a speaking order has not been passed on re-assessment, the proper officer may audit the assessment of duty of the imported goods or export goods at his office or at the premises of the importer or exporter, as may be expedient, in such manner as may be prescribed”.
If you thought ‘self assessment' was a benefit, please change your thoughts. Now with self-assessment comes AUDIT by the Department in your premises. All these days, you had to bear with the Customs officers only in their offices, but now they will come to your offices to audit your self assessed import and export documents.
The Board proposes to bring in the ‘On-site Post Clearance Audit at the Premises of Importers and Exporters Regulations, 2011'.
As per these regulations, the Importers and Exporters are obliged to:
++ Maintain such documents and records of transaction including electronic data relating to assessment of duty of imported or export goods, as the case may be, as prescribed by the Board for a period of five years from the date of import or export, as the case may be;
++ Make available in a timely manner such books of account, records of transaction and other relevant documents relating to imported or export goods, as the case may be, as required by the auditor;
++ Provide true and correct information to the auditor;
++ Render assistance to the auditor in the discharge of his official duty and shall in no case refuse or obstruct the auditor.
And the Auditor will conduct the audit in the premises of the importer or exporter and can:
++ Obtain from the importer or exporter, as the case may be, prior information relating to imported or export goods, as the case may be, before conducting audit.
++ Take a tour of the premises to gather relevant information relating to imported or export goods
++ In the course of audit, inspect the imported or export goods, if available
++ Take samples of imported or export goods and copy of relevant documents to verify the correctness of assessment of duty.
Where the importer or exporter is in agreement with the audit findings, in part or in full, he may make voluntary payments of duty due, if any, and the auditor shall take the same on record in the Audit Report;
The auditor shall before finalizing the Audit Report discuss with the importer or exporter, as the case may be, steps, if any, to improve compliance;
Penalty: An importer or exporter, who contravenes any provision of these Regulations or abets such contravention or fails to comply with any provisions of these Regulations with which it was his duty to comply, shall be liable to a penalty, which may extend to fifty thousand rupees.
‘Auditor' is an officer of customs who is assigned the function of audit by the Commissioner of Customs;
‘Audit' is defined as examination of bills of entry, shipping bills, invoices, packing lists, import licences, books of account, and other records of transaction relating to imported and export goods, so as to check the accuracy and correctness of assessment of duty thereof and may include inspection of goods at the premises, if available.
Audit by the Department means – a group of officers swarming your premises (actually you have to arrange transport, food etc., for them) and disturbing your work for three to four days with all their silly questions and despicable demands. You heave a sigh of relief when they leave, but you are in for periodic pestering. Who wants such a kind of ‘self assessment'? Is it a benefit or a punishment?
Now that Customs Officers are being empowered to enter the premises of importers and exporters, the Audit teams from the CAG's Office will not be far behind. They would also love to audit the importers, especially in their (importers') offices, instead of in the dusty Custom Houses.
Any way, the Regulations are not yet LAW and the Board wants your suggestions and comments latest by 16th August 2011, which can be mailed at dircus@nic.in
CBEC Letter F.No.450/1/2010-Dir (Cus): Dated August 01 2011