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Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Circular No. 23/2016 -Customs
New Delhi, Dated the 01st June, 2016
To,
All Principal Chief Commissioners Customs,
All Principal Chief Commissioners of Customs & Central Excise,
All Chief Commissioners of Customs,
All Chief Commissioners of Customs & Central Excise,
All Directors General, Chief Departmental Representative,
All Principal Commissioners of Customs,
All Principal Commissioners of Customs & Central Excise,
All Commissioners of Customs,
All Commissioners of Customs & Central Excise.
Sub: Manner of payment of interest on warehoused goods
Section 61 of the Customs Act, 1962 had been amended vide the Finance Act,
1994 whereby the interest payable with respect to warehoused goods was to be
calculated with reference to the duty payable at the time of clearance of the
goods from the warehouse. This was clarified through
Circular no 31/96-Customs
dated 07.06.1996.
- However, noting the high inventory of goods lying in bonded
warehouses, with the
consequential effect of locking revenue, the Board had vide
Circular
47/2002-Customs dated
29th July 2002, prescribed that interest due in terms of section 61 should
be collected before
allowing extensions, with a view to encourage early clearances. This led to
importers having to
deposit interest and seek refunds in the event of interest not being
payable, for example in cases where goods were finally exported. In certain industries, the Board
had relaxed the
above condition for extending the warehousing period but prescribed that a
demand notice
should be served upon the importer and the same decided upon clearance of
the goods, i.e.
when the liability became determinable (Para 7 of
Circular 10/2006-Customs
dated 14th Feb
2006).The extant circulars have been reviewed by the Board with a view
towards simplification
of processes and promoting the ease of doing business.
- In order to secure revenue and discourage protracted duty deferment
arising due to
warehousing, the Board has prescribed conditions for furnishing of security
by importers vide
circular 21/2016-Customs dated 31.05.2016. The said circular also specifies
the amount (which
is a percentage of the sum of duty and interest) of bank guarantee that
would have to be
furnished before allowing an extension in warehousing period. In
continuation of the earlier
dispensation, certain industries have been exempted from furnishing of such
security.
- In view of having prescribed the requirement of furnishing a bank
guarantee as security,
it has been decided by the Board that henceforth there would be no
requirement of payment of
interest prior to allowing extensions of warehousing period nor would there
be any need to
issue a demand for payment of interest. Interest, if any, shall be paid at
the time of ex-bonding
of the goods from the warehouse.
- Difficulties, if any, should be brought to the notice of the Board.
- Hindi version follows.
(Temsunaro Jamir)
Under Secretary to the Govt. of India
F. No. 473/20/2013-LC
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