DEFERRED PAYMENT OF IMPORT DUTY

[Mr. M. GOVINDARAJAN]

Deferred payment

Section 47 of the Customs Act, 1962 (‘Act’ for short) provides for clearance of goods for home consumption.  Section 47(1) provides that where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption.  The proviso to this section provides that the Central Government may, by notification in the Official Gazette, permit certain class of importers to make deferred payment of said duty or any charges in such manner as may be provided by rules.

Section 156 of the Act gives powers to the Central Government to make Rules.  Section 156(1) provides that without prejudice to any power to make rules contained elsewhere in this Act, the Central Government may make rules consistent with this Act generally to carry out the purposes of this Act.  Section 156(2)(c) provides that in particular and without prejudice to the generality of the foregoing power, such rules may provide for the due date and the manner of making deferred payment of duties, taxes, cesses or any other charges under sections 47 and 51 (clearance of goods for exportation).

Rules

By virtue of powers given by the Act to the Central Government under Section 47 and Section 156 the Government made ‘The Deferred Payment of Import Duty Rules, 2016’ vide Notification No. 134/2016-Cus (N.T.) dated 02.11.2016.  This Rule came into effect from 16.11.2016.

Applicability

These rules shall be applied to eligible importer who have been Notified under Section 47(1) of the Act.  The Government, vide Notification No.135/2016-Cus (N.T.) dated 02.11.2016, notified the importers certified under Authorized Economic Operator programme as AEO (Tier-two) and AEO (Tier-Three) for making deferred payment under Section 47(1) of the Act.  AEO means Authorized Economic Operator certified by the Directorate General of Performance Management under the Central Board of Excise and Customs.

Intimation by the importer

Rule 4 provides that an eligible importer who intends to avail the benefit shall intimate to the Principal Commissioner of Customs or the Commissioner of Customs, having the jurisdiction over the port of clearance, his intention to avail the benefit of deferred payment.  The Principal Commissioner/Commissioner shall, upon being satisfied with the eligibility of the importer to pay the duty, allow the eligible importer to pay the duty by the due dates as specified.

Intimation addressed to the AEO Programme Manager with a copy to the Principal Commissioner(s) of Customs or the Commissioner(s) of Customs, as the case may be, having jurisdiction over the port(s) of clearance shall be considered as intimation by an eligible importer of his intention to avail the said benefit.

Nodal person

Every importer certified as AEO-T2/AEO-T3 shall obtain ICEGATE Login which is essential to avail benefits envisaged in the AEO Programme. Further, in order to avail the facility of deferred payment, every AEO-T2/AEO-T3 is to nominate a nodal person borne on their establishment who would be responsible for authenticating all the customs related transactions on behalf of the AEO. Since the option of deferred payment has been extended only to AEO (Tier-Two) and AEO (Tier-Three), it is important for the AEO to exercise due caution in nominating the AEO nodal person to prevent misuse of facility of deferred payment. The contact details of AEO nodal person shall also be provided in ICEGATE login to ensure that the information reaches in time at their registered mail for authentication.

The eligible importer who intends to make deferred payment shall indicate the same using flag "D" in the Payment Method column of Bill of Entry filed. In order to ensure that the facility of deferred payment is availed only by the eligible importer, option has been provided in ICEGATE Login for AEO Nodal person to acknowledge such intent and authenticate using One Time Password (OTP) sent to his registered e-mail address. The Nodal person would be able to authenticate multiple Bills of Entry at once. Only on such authentication by the eligible AEO importer, customs clearance would be provided for the consignment under deferred payment of duty Rules.      

Due date of payment of duty

Rule 5 provides that the eligible importer shall pay the duty by the dates specified as detailed below, inclusive of the period (excluding the holidays)-

• for goods corresponding to the Bill of Entry returned for payment from 1^st day to 15^th day of any month, the duty shall be paid by the 17^th of that month;
• for goods corresponding to the Bill of Entry returnedfor payment from 16^th day till the last day of any month other than March, the duty shall be paid by the 2^nd day of the following month;
• for goods corresponding to Bill of Entry returned for payment from 16^th day till the 29^th day of the March, the duty shall be paid by 31^st March;
• for goods corresponding to Bill of Entry returned for payment from 30^th March to 31^st March, the duty shall be paid by 2^nd April.

Mode of payment

Rule 6 provides that the eligible importer shall pay the duty electronically.  The Assistant Commissioner/Deputy Commissioner of the Customs may allow the mode of payment other than electronic mode for reasons to be recorded in writing.  The eligible importer also has an option to select the challans belonging to the deferred period and pay at anytime, even before the due date at their convenience.

Ineligibility

Rule 7 provides that an eligible importer who fails to pay duty in full by due date more than once in a period of three consecutive months shall not be permitted to make deferred payment.  The facility of deferred payment shall not be restored unless the eligible importer has paid the duty in full along with interest.

Inapplicability of Rules

Rule 8 provides that these rules shall not apply to the goods which have not been assessed or not declared by the importer in the entry made under the Act.

Reports

Reports regarding availing of deferred payment at each port are made available in ICES. The Principal Commissioners/ Commissioners of Customs may monitor the same for their jurisdiction.