T N C Rajagopalan: Budget changes in Customs law

Usually, the Union Budget generates excitement among tax payers, as many amendments to the laws here are made. This time, hardly any changes were made in the excise and service tax laws, to be phased out when the goods and services tax laws will replace these in the next few months. However, the Finance Bill proposes a few changes in the Customs law, which is set to continue. 

Sub-section (3) of Section 46 of the Customs Act is being substituted, to make it mandatory to file a bill of entry before the end of the next day after the one (excluding holidays) on which a vessel or aircraft or vehicle with the goods arrives at a Customs station at which such goods are to be cleared, for home consumption or warehousing. At present, this section does not prescribe any time period within which the bill of entry has to be filed.

Once the proposed change takes effect, an importer will get only one day from arrival of the vessel to file the bill of entry. If he fails to do so, he will have to pay a fee for late presentation. The fee will be prescribed after enactment of the Finance Act, 2017. This provision was introduced after a study of reasons for delay in clearance of imported goods revealed it was importers who delayed filing this bill of entry or payment of duty, not the Customs. So, section 47 is also being amended, making it mandatory for importers to pay the duty on the same day in a self-assessment and by the next day in an assessment by the Customs. Any delay will attract interest. 

Section 2 of the said Act is being amended to insert a clause, 3A, to define a beneficial owner as any person on whose behalf goods are being imported or exported or who exercises effective control over such goods. The definitions of importer and exporter are also being amended accordingly. This is to tackle a situation where the person filing a bill of entry or shipping bill is only a front for the real owner or person having effective control of the goods or beneficial interest. Till now, in a violation, it was difficult to proceed against any person other than the one filing the bill of entry or shipping bill. 

Sub-section (13) of Section 2 of the Act is being amended to bring a foreign post office and international courier terminal (also being defined separately) within the definition of a Customs Station. Consequently, Section 7 is being amended to empower the Board to notify such post offices and courier terminals. The present provisions for clearance of goods imported through post or courier will be withdrawn or modified.

Other meaningful changes proposed include documents for verification of self-assessment and mechanisms for advance ruling, refund, unjust enrichment, settlement commission, storage of goods in bonded warehouse under Section 49 and filing of general manifest in export. 

E-mail: tncrajagopalan@gmail.com