Provisional Assessment
Conditions for allowing provisional assessment
- In above situations, pending the production
Terms of the Bond
Determination of amount of bond for provisional assessment
- The provisions of the Customs
Surety and Security of the bond
-
The Customs (Provisional Duty Assessment) Regulations, 1963
Finalisation of provisional assessment
- It is to be ensured that most
Provisional Assessment
Once goods declaration is submitted in the prescribed form (Bill of Entry or
Shipping Bill ) containing all the relevant information/details and along-with
all the relevant documents, the duty leviable on the imported goods or export
goods, if any, is assessed by the Customs officer. Sometimes, it is not possible
to assess the duty due to non-availability of some relevant information/document
or any other reason. Withholding clearance of goods in such cases may cause
hardship to the importers by way of payment of demurrage/detention charges,
disturbance in production schedule and other financial losses. Similarly in
exports, delay in clearance may cause cancellation of export order, increase in
interest liability and other financial losses to the exporters. To meet such
exigencies, provisions have been made in section 18 of the Customs Act, 1962 to
assess the duty provisionally and allow clearance of the goods by taking a bond
with appropriate security.
Conditions for allowing provisional assessment
- The provisional assessment may be resorted to in following situations:
- where the proper officer of Customs is satisfied that an
importer or exporter is unable to produce any document or
furnish any information necessary for the assessment of duty on
the imported goods or the export goods, as the case may be; or
- where the proper officer of Customs deems it necessary to
subject any imported goods or export goods to any chemical or
other test for the purpose of assessment of duty thereon; or
- where the importer or the exporter has produced all the
necessary documents and furnished full information for the
assessment of duty but the proper officer of Customs deems it
necessary to make further enquiry for assessing the goods.
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- In above situations, pending the production
of such
documents or furnishing of such information or completion of such test or
enquiry, the proper officer of Customs may order that the duty leviable on
goods be assessed provisionally. The importer (or exporter), has to execute
appropriate bond and furnish requisite security to the satisfaction of
officer for payment of the deficiency, if any, between the duty finally
assessed and duty provisionally assessed. On final assessment of duty in
case of goods cleared for home consumption or exportation, the amount paid
provisionally is adjusted against the duty finally assessed. If the amount
so paid falls short of the duty finally assessed, the importer or exporter
has to pay the deficiency; however, if amount so paid is in excess of duty
finally assessed, the importer or exporter is entitled to a refund. In the
case of goods being warehoused, if duty finally assessed is in excess of the
duty provisionally assessed, the proper officer of Customs may require the
importer to execute a bond, binding himself in a sum equal to twice the
amount of the excess duty.
Terms of the Bond
-
- Where the provisional assessment is allowed pending
the production of any document or furnishing of any information by the
importer or exporter, as the case may be, the terms of bond generally
are that required document/information shall be furnished within one
month or within such extended period as the proper officer may allow,
and that the person executing the bond shall pay the deficiency, if any,
between the duty finally assessed and the duty provisionally assessed.
- Where the provisional assessment is allowed
pending the completion of any test or enquiry, the terms of bond
generally are that the person executing the bond shall pay the
deficiency, if any, between the duty finally assessed and the duty
provisionally assessed.
Determination of amount of bond for provisional assessment
- The provisions of the Customs (Provisional Duty
Assessment) Regulations, 1963 lay down that the importer or exporter
claiming provisional assessment is required to execute a bond for the
difference between the duty that may be finally assessed and the provisional
duty. The same regulations also provide that the proper officer of Customs
may require that the bond to be executed under these regulations may be with
such surety, or security or both as the proper officers deems fit. There may
of course, be cases where calculation of exact difference between duty
provisionally assessed and duty finally assessed may not be possible. But,
even in such cases invariably, it would be possible to make some estimate of
the same. In all the cases, the amount of surety and security for
provisional assessment is normally restricted to the difference of duty
provisionally assessed and duty which may be finally assessed.
Surety and Security of the bond
-
The Customs (Provisional Duty Assessment) Regulations, 1963
allows proper officer of Customs to accept bond for provisional
assessment with such surety or security or both, as he deems fit. Normally
requirement of surety/security is dispensed with in respect of Government
Departments (or even Government Undertakings).
Finalisation of provisional assessment
- It is to be ensured that most of the ordinary type of
cases of provisional assessment are finalised expeditiously well within six
months of the date of provisional assessment. In respect of machinery
contract cases or registered large project import cases, where imports take
place over long periods, some times extending over a number of years and
where action to finalise the case can be taken only after all the imports
under the contract have been made, every effort should be made to finalise
the cases within six months of the date of import of the last consignment
covered by the contract.
(Ref. Customs (Provisional duty Assessment) Regulations, 1963 issued vide
M.F.Director (ICD).R) Notification No. 181-Cus., dated 13/7/1963 and
instructions issued vide Board's letters F.No. 512/5/72-Cus.VI dated 23/4/1973
and F.No. 511/7/77-Cus. VI dated 9/1/78).