chapter - 3 levy and collection and exemptions

CUSTOMS ACT, 1962

LEARNING OUTCOME

Understanding provisions of Levy, Exemptions, Assessment of Custom Duty

(A) Imposition of customs duty

Levy Assessment Collection

(B) Factors to determine liability

Goods on which – duty is leviable Point and circumstances of duty Mechanism for assessment Exemption from duty Remission and abatement of duty Relevant date of rate and tariff

(ii) Point and circumstances

Taxable point Clearance of goods Re-importation of goods produced in India (U/s 20) Duty on derelict/ jetsam/ wreck (U/s 21)

(iii) Assessment u/s 2 (2)(a) Means :- Determination of : duty value of goods duty payable along with other documents.(b) Statutory definition: Self assessment (section 17) Re-assessment (section 17) Provisional assessment (section 18) Any assessment – duty assessed is NIL

self Assessment u/s 17 Applies to:- an importer entering any imported goods (U/s 46)- an exporter entering any exported goods (U/s 50)SHALL SELF-ASSESS THE DUTY – LEVIABLE ON SUCH GOODS. Verified by proper officer – examine or test:- Imported goods- Exported goods Electronically mandatory – manually specifically

permitted by Commissioner

re-Assessment u/s 17

INCORRECT SELF-ASSESSMENT U/s 17 (4):

- On verification/ examination/ testing- Self- assessment – Not done correctly- Proper officer may – Re assess the duty leviable

re-Assessment u/s 17 PASSING OF SPEAKING REASSESSMENT ORDER:Any re assessment – done under 17 (4): And it is contrary to self- assessment done – by

importer/ exporter – regarding: valuation, classification, exemption/concessions

OR Importer/ exporter – does not confirm –

acceptance – said re assessment in writing. Pass order – within 15 days - date of re assessment

– bill of entry/ shipping bill

re-Assessment u/s 17 PASSING OF SPEAKING REASSESSMENT ORDER:Any re assessment – done under 17 (4): And it is contrary to self- assessment done – by

importer/ exporter – regarding: valuation, classification, exemption/concessions

OR Importer/ exporter – does not confirm –

acceptance – said re assessment in writing. Pass order – within 15 days - date of re assessment

– bill of entry/ shipping bill

Audit of self assessment Where re- assessment/ speaking order – not

passed. Proper officer may audit:- Assessment of duty- At his office/ at the premises - imported/ export

goods- In manner prescribed – On site Post clearance Audit

at the Premises of Importers and Exporters Regulations, 2011

provisional Assessment u/s 18

It is pending Final Assessment

Cases U/s 18 (1): When importer unable to make self assessment Where proper officer – deems it necessary – to

carry out – chemical or other tests When importer/ exporter – submitted/ produced –

all documents – P.O. – make further enquiry Where necessary documents – Not submitted

Exemption U/s 25

General Special

General: Central Govt. – satisfied – necessary in public interest – exemption (absolutely/ subject to conditions)

Special: Central Govt. – satisfied – necessary in public interest – Special Order ( in exceptional nature) – exempt goods – from payment of duty (cash)

Exemption U/s 25

Grounds for exemptions: Moral Grounds:- Goods do not reach Indian soil- Goods reached India but not available for

consumption- Goods damaged/ deteriorated in transit. Discretionary Grounds: Central Govt., allow

exemption :- For controlling economy- Industrial growth of the country

Exemption U/s 25

Exemption not exceed Statutory Duty Date of implementation Preferential Rate of duty Lower rate of duty under trade agreement

(determination of origin)

Remission and abatement

Remission/ Abatement of duty:

In case of pilfered goods (U/s 13) In case of damaged/ deteriorated goods (U/s 22) In case of lost/ damaged or abandoned goods (U/s

23) Short-packed or short-landed goods

Remission on Pilfered GoodsImporter – not liable to pay duty, if:

Imported goods – pilfered (small theft);Such pilferage – take place- After the un loading thereof and- Before the proper officer – made order for:

- clearance for home consumption- deposit in warehouse

If restored (goods): liable to pay dutyPilferage in Custody: Custodian is liable to pay duty.

Remission on Pilfered GoodsSituation 1: before arrival of goods in India – No Liability.Situation 2: after arrival but before customs clearance – Liable to pay (but extinguished U/s 13 of the Act)Situation 3: after custom examination – but before order of clearance – Liable to pay – but can claim refund.

Remission on lost, destroyed, abandoned

Situation 1: Lost or destroyed It is shown - To the satisfaction of Assistant/ Deputy

Commissioner- That goods – have been: a) Lost (other than

pilferage); b) destroyed- Any time - before clearance - home consumption.Treatment:Assistant/ Deputy Commissioner – shall remit duty on such goods.

Remission on lost, destroyed, abandoned

Situation 2: Relinquishment of TitleOwner of goods – any time before :- Order for home consumption (U/s 47)or- Deposit in warehouse (U/s 60)- Relinquish the titleTreatment:Shall not pay duty on such goods. but not in case of offending goods

Remission on damaged or deteriorated goods

Any of the three circumstances:Situation 1: before arrival of goods in India –Situation 2: after arrival but before customs clearanceSituation 3: after custom examination – but before order of clearance

Then relief of duty - out of total duty is given on such goods

Short packed or short landed goods

Short Packed: not reached Indian territory – NO DUTY

Short landed: by mistake: unloaded at other port or not unloaded – destination: NO DUTY