Customs - Provisional Assessment - Board Guidelines - ease of Doing Business
AS per the Customs (Provisional Duty Assessment) Regulations 2011, when provisional assessment is ordered, the assessee (importer or exporter) is required to
1. Deposit about 20% of the differential duty
2. Execute a bond
3. Provide surety or security or both, for the bond as deemed fit by the Proper Officer.
Now Board has taken some strong decisions:
1. Insofar as the requirement of obtaining a 20% deposit of the duty provisionally assessed, the Board has decided that this condition be dispensed, particularly, as it necessitates following the procedure of refunds in cases where final assessment is in favour of the importer. Such requirements add to the transaction costs, lead to delays in clearance and detract from the ease of doing business.
2. Acceptance of a surety requires making an evaluation of the underlying asset value or of the net worth of the person executing the same. This poses difficulties to the importers as well as administrative challenges to the Department in valuing sureties. Therefore, the Board has decided that the requirement of security needs to be met by either obtaining a bank guarantee or a cash deposit, as convenient to the importer, and that no sureties shall be obtained.
3. The Customs (Provisional Duty Assessment) Regulations 2011 is rescinded.
Board has issued fresh guidelines for provisional assessment.
Wherever, duty is to be assessed provisionally, the importer shall:
(a) for the purposes of undertaking to pay on demand the deficiency, if any, between the duty as may be finally assessed and the duty provisionally assessed, execute a bond in the prescribed form (enclosed); and
(b) furnish such security for the payment of the duty deficiency, as indicated in the Circular.
The security to be obtained shall be in the form of a bank guarantee or a cash deposit, as convenient to the importer.
Board clarifies that the amount of security shall be determined on the basis of duty differential and not the CIF value of goods and that provisional assessments under section 18 are to be carried out with respect to cases where the duty is in dispute. Cases relating to execution of a bond or undertaking specified as a condition to a notification or those requiring compliance of conditions under allied Acts are not to be provisionally assessed under section 18 of the Customs Act.
CBEC Circular No. 38/2016-Customs., Dated August 22 2016
Notification No. , Dated: August 22, 2016