Trade Protests – Choice of When to File Bill of Entry should be Left to Importer

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If Bill of Entry is filed late, goods will incur demurrage after expiry of free period. In addition, there is detention fee, interest on late payment of duty and interest and depreciation of the goods in storage. In sum, there are enough regulations and financial checks to keep the goods moving.

There can be several grounds for “late” filing of Bill of Entry including those of force majeure like illness, accident or breakdown of transport services.

What if the Bill of Entry is not filed “before the end of the next day” of entry of the vessel in the port. There is no provision for such cases, regulation of the delay through relaxation of law should be permitted.

Last, the provision regarding filing of Bill of Entry prior to arrival of vessel has been dropped. This was a useful provision to get the procedural clearance done during the shipping period between dates of export on the foreign land to date of import.

Very often, the importer may not even know that the vessel carrying his goods has arrived. The detail of the goods may not be known or he may want to examine the container to see for himself the actual state of the goods before committing himself to the customs in the form of Bill of Entry. Forcing him to file the BoE on the day vessels enters is not fair. Customs should wait for the actual event of landing of goods in customs or custodian warehouses before forcing the importer to file BoE.

The reduction in time period for payment of duty from two days to one day will increase transaction cost. Interest must be calculated and paid for practically every import, this tantamount to imposition of duty through the back door without sanction of Parliament.

Last, the concept of “beneficial owner” has been introduced in the Act for the first time. In this, customs will try to bring out the “real” owner behind the importer on record. The owner will be included in the importer category so as to make him liable to fine, penalty and other consequences of wrongful imports. This is yet another case of over reach. Customs should confine themselves to collection of duty from the goods and limit their claims only to the value limit of goods. Anything beyond that only adds to compliance burden and hinders ease of doing business.

The proposed changes will be effective only after passage through Parliament in March or April. Till then may remain only proposals before Lok Sabha.

The relevant Sections of the earlier proposed sections of the law are given below.

Budget Proposals of Amendment in Customs Act, 1962

Clearance of imported goods – Amendments Proposed by Finance Bill 2017

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SECTION 46. Entry of goods on importation- ***
“(3) The importer shall present the bill of entry under sub-section (1) before the end of the next day following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing: Provided that a bill of entry may be presented within thirty days of the expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for importation into India: Provided further that where the bill of entry is not presented within the time so specified and the proper officer is satisfied that there was no sufficient cause for such delay, the importer shall pay such charges for late presentation of the bill of entry as may be prescribed.” (3)   A bill of entry under sub-section (1) may be presented at any time after the delivery of the import manifest or import report as the case maybe : Provided that the Commissioner of Customs may in any special circumstances permit a bill of entry to be presented before the delivery of such report : Provided further that a bill of entry may be presented even before the delivery of such manifest if the vessel or the aircraft by which the goods have been shipped for importation into India is expected to arrive within thirty days from the date of such presentation.	Sub-section (3) of Section 46 Substituted
SECTION 47. Clearance of goods for home consumption ***
(2)  “The importer shall pay the import duty— (a) on the date of presentation of the bill of entry in the case of self-assessment; or (b) within one day (excluding holidays) from the date on which the bill of entry is returned to him by the proper officer for payment of duty in the case of assessment, reassessment or provisional assessment; or (c) in the case of deferred payment under the proviso to sub-section (1), from such due date as may be specified by rules made in this behalf, and if he fails to pay the duty within the time so specified, he shall pay interest on the duty not paid or short-paid till the date of its payment, at such rate, not less than ten per cent. but not exceeding thirty-six per cent. per annum, as may be fixed by the Central Government, by notification in the Official Gazette.” Where the importer fails to pay the import duty under sub-section (1) within five days excluding holidays from the date on which the bill of entry is returned to him for payment of duty, he shall pay interest at such rate, not below ten percent and not exceeding thirty six percent. perannum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, on such duty till the date of payment of the said duty :	Sub-section (2) of Section 47 Substituted
SECTION 27.  Claim for refund of duty. -(1) Any person claiming refund of any duty or interest,- (a) paid by him; or (b) borne by him, ***
“(g) the duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made where— (i) such excess payment of duty is evident from the bill of entry in the case of self-assessed bill of entry; or (ii) the duty actually payable is reflected in the reassessed bill of entry in the case of reassessment.”.	Section 27, in sub-section (2), in the first proviso, after clause (f), the following clause shall be inserted,

Section 2 of Customs Act, 1962.  Definitions. - In this Act, unless the context otherwise requires.

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(3A) “beneficial owner” means any person on whose behalf the goods are being imported or exported or who exercises effective control over the goods being imported or exported;	New Sub-section
(13) "customs station" means any customs port, customs airport, international courier terminal, foreign post office, or land customs station;	The words in bold letters inserted
(16) "entry" in relation to goods means an entry made in a bill of entry, shipping bill or bill of export and includes in the case of goods imported or to be exported by post, the entry referred to in section 82 or the entry made under the regulations made under section 84;	The words in strikethrough omitted
(20) "exporter", in relation to any goods at any time between their entry for export and the time when they are exported, includes any owner, beneficial owner or any person holding himself out to be the exporter;	The words in bold letters inserted
(20A) “foreign post office” means any post office appointed under clause (e) of sub-section (1) of section 7 to be a foreign post office;	New Sub-section
(26) "importer", in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner, beneficial owner or any person holding himself out to be the importer;	The words in bold letters inserted
(28A) “international courier terminal” means any place appointed under clause (f) of sub- section (1) of section 7 to be an international courier terminal;	New Sub-section
(30B) “passenger name record information” means the records prepared by an operator of any aircraft or vessel or vehicle or his authorised agent for each journey booked by or on behalf of any passenger;	New Sub-section