Implementation
of ‘Self Assessment’ in Customs
·
Finance
Act, 2011 which was assented by the President on 08.04.2011
·
Re-assessment
of duty
·
On Site
Post Clearance Audit’
·
Provisional
assessment of duty
·
Bill of
Entry (Electronic Declaration) Regulations, 2011
·
Shipping
Bill (Electronic Declaration) Regulations, 2011
·
Erstwhile
Section 17 or Section 18 of the Customs Act, 1962
The
following Public Notice was issued by the Commissioner of Customs (Import) Air
Cargo Complex Mumbai on 21 May 2011.
[Ref: Public Notice No. 15 dated 21 May 2011]
Sub: Implementation of ‘Self-Assessment’ in Customs
Attention of Importers/Exporters/CHA’s and Trade is invited to Board’s Circular No. 17/2011 dated 08.04.2011 issued
from F. No. 450/26/2011-Cus.IV on the subject of implementation of
‘Self-Assessment’ in Customs.
2. The Finance Act, 2011 which was assented by the President on
08.04.2011 stipulates ‘Self-Assessment’ of Customs duty in respect of imported
and export goods by the importer or exporter, as the case may be. This means
that 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.
3. 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, benefit
of exemption notifications claimed, if any, in respect of the imported / export
goods while presenting Bill of Entry or Shipping Bill. This should not pose any
new difficulties since the importers / exporters and CHAs have been filing
these documents containing the required details regularly in the ICES.
4. 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. However, this facility shall not be allowed
in a routine manner and the manual filing of Bill of Entry shall be allowed
only in genuine and deserving cases. Similarly, on export side also, Section 50
of the Customs Act, 1962 makes it obligatory for exporters to make entry of
export goods by presenting a Shipping Bill electronically to the proper officer
except for the cases where it is not found feasible to make such entry
electronically. The Commissioner concerned in these cases may allow manual
filing of Shipping Bill. Again, this authority shall be exercised cautiously
and only in genuine cases.
5. 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 particulars having a 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. For
the purpose of verification, the Asstt./Dy. Commissioner may order for examination or testing of
the imported or export goods. The Asstt./Dy. Commissioner may also require the production of any
relevant document or ask the importer or exporter to furnish any relevant
information. Thereafter, if it is found that self-assessment of duty has not
been done correctly by the importer or exporter, the
proper officer may re-assess the duty. This is without prejudice to any other
action that may be warranted under the Customs Act, 1962. On re-assessment of
duty, the proper officer shall pass a speaking order, if so desired by the
importer, within 15 days of re-assessment. This requirement is expected to
arise when the importer or exporter does not agree with re-assessment, which is
different from the original self-assessment. There may be situations when the
proper officer of Customs finds that verification of self-assessment in terms
of Section 17 requires testing / further documents / information, and the goods
cannot be re-assessed quickly but are required to be cleared by the importer or
exporter on an urgent basis. In such cases, provisional assessment may be done
in terms of Section 18 of the Customs Act, 1962, once the importer or exporter
furnishes security as deemed fit by the proper officer of Customs for
differential duty equal to duty provisionally assessed by him and the duty
payable after re-assessment.
6. One of the salient features of self-assessment 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.
7. 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. As far as possible, steps shall be taken to
provide guidance to importers/ exporters so that they are able to self-assess
and file the Bill of Entry. However, such guidance will not be legally binding.
8. 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.
9. Bill of Entry (Electronic Declaration) Regulations, 2011 are being
framed in supersession of the Bill of Entry (Electronic Declaration)
Regulations, 1995. Bill of Entry (Electronic Declaration) Regulations, 2011 shall
incorporate changes made vide Finance Act, 2011 and mandate self-assessment by
the importer or exporter, as the case may be. While amending the same,
requirements of ICES 1.5 shall be taken into account since the migration to
ICES 1.5 in respect of locations having ICES 1.0 application is almost complete
at all major Customs locations. Similarly, Shipping Bill (Electronic
Declaration) Regulations, 2011 are also being framed in tune with statutory
provisions of Sections 17, 18 and 50 of the Customs Act, 1962. All these
proposed changes viz. formulation of Regulations and amending formats of Bills
of Entry / Shipping Bills requires detailed
consultation with DG (Systems). Thus, these changes will take some time and
till then, the existing Regulations and forms shall continue to apply to the
extent these do not conflict with the amended statutory provisions that come
into force from the date of enactment of the Finance Bill, 2011.
10. Thus, it is clarified 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.
11. The aforementioned changes have become effective from the date of
enactment of the Finance Bill, 2011.
F. No. S/3-Misc-PRO-195/2010 ACC