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 Supplement to the 5th Edition of CBLR Exam Guide

 Note for Readers: GST Changes mentioned in the supplement have wide ranging effects not only w.r.t to customs tariff but relating to other customs operations also. So, please read these carefully.

GST Changes in Customs Laws & Procedures

1.     Introduction of GST

Central Government has w. e. f. 1.7.2017, introduced Central Goods and Services Tax (CGST) under the Central Goods and Service Tax Act, 2017 and Integrated Goods and Services Tax (IGST) under the Integrated Goods and Services Tax Act, 2017 in the country in lieu of Central Excise Duty and Central Tax respectively. With these changes, a new tax regime has emerged in the country. This new tax regime has necessitated changes in the Customs Laws and procedures also. Till 30.6.2017, imported goods in addition to basic customs duty leviable under section 12 of the Customs Act, 1962 were subject to:

i.                    Additional Duty of Customs (Counter Veiling Duty) under section 3 (1) of the Customs Tariff Act, 1975;

ii.                   Special Additional Duty of Customs (SAD 4%) under section 3 (5) of the Customs Tariff Act, 1975; and

iii.                 Education Cess &Secondary and Higher Education Cess under the Finance Act

 

2.      Constitutional Amendment

The aforesaid changes have been possible only after amending the Constitution of India with 101 amendment to the constitution. This amendment Act is known as Constitution (One Hundred and First Act Amendment) Act, 2016. Now, the Article 246 A of the Constitution states as under:

"246A. (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.

(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.

Explanation.—The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council.’’

These provisions mean that Parliament and every State Legislature have power to make laws with respect to goods and services tax. But, in terms of sub clause 2, Parliament has exclusive power to make law with respect to inter State supply of goods and services or both in course of international trade or commerce. 

 So, after the aforesaid amendment, Parliament has made following laws:

I.                    CGST Act, 2017

II.                  IGST Act, 2017.

The State Governments in India have also made their respective State Goods and Services Tax Act in 2017 for levy and collection of SGST on intra state supplies of goods or services or both.

Similarly for levy and collection of GST in Union Territories on intra UT supplies of goods, services or both Union Territory Goods and Services Tax Act, 2017 for each UT is also enacted.

Details about CGST and IGST

CGST

With effect from 1.7.2017, central excise duty which was levied on the manufactured goods at the stage of manufacture stands abolished except on Pan Masala and some Petroleum products and is replaced by the Central Goods and Services Tax (CGST) which is levied by the Central Government under the CGST Act, 2017 on the intra state supplies of goods or services or both. It is a destination based tax and is also referred to as Central Tax. 

IGST 

As stated above, w. e. f. 1.7.2017, IGST is levied on inter-state supplies of goods or services or both under section 5 (1) of the IGST Act, 2017 except supplies of liquor for human consumption at such rate, not exceeding 40 %, as notified by the government on recommendation of the GST Council. This is referred as integrated tax. 

3.   GST and other Taxes on Imported Goods in the new regime

With effect from 1.7.2017, all imported goods except Pan Masala and some petroleum products, in addition to Basic Customs Duty leviable under section 12 of the Customs Act, 1962, shall attract,-

i.                     Integrated Goods and Services Tax (Integrated Tax) as a counter veiling duty; and

ii.                    Compensation Cess wherever applicable;

iii.                  Education Cess and Secondary and Higher Education Cess will also be levied on the Basic Customs Duty.

Every person who is required to pay GST i.e. taxpayer should get registered in GST and take GSTIN (Goods and Service Tax Identification Number). This number is very important for the purpose of payment of GST, claiming refund etc.

The details of taxes at i to iii above are discussed below.

3.1 Integrated Goods & Service Tax (Integrated Tax) on Imported Goods

i. Proviso to section 5 (1) of the IGST Act, 2017 states that IGST on imported goods shall be levied and collected under section 3 of the Customs Tariff Act, 1975 on the value determined under the said Act at the point when duties of customs are levied and collected under section 12 of the Customs Act, 1962. With the introduction of IGST as Integrated Tax on imported goods, SAD 4 % which was being levied under section 3 (5) of the Customs Tariff Act, 1975 stands abolished in addition to Additional duty of Customs levied under section 3 (1) of the Customs Tariff Act, 1975. These duties were levied to create a level playing field for the domestic goods. Now, this role will be played by the IGST.

ii. The intent to levy and collect IGST as Integrated tax on imported goods is carried forward / implemented under the provisions of sub section (7) of section 3 of the Customs Tariff Act, 1975. This sub-section provides that any article which is imported into India shall, in addition, be liable to integrated tax at such rate not exceeding 40 % as is leviable under section 5 of the IGST Act, 1975 on a like article on its supply in India on the value determined under sub section 8.

iii. Sub section 8 of section 3 provides that for the purpose of calculating integrated tax on an imported article where it is levied as a percentage of the value, the value shall be aggregate of the following:

i.                    Value determined under section 14 (1) of the Customs Act, 1962 or tariff value fixed under section 14 (2) of the Customs Act, 1962; and

ii.                   Basic customs duty levied under section 12 of the Customs Act, 1962; and

iii.                 Any sum which is leviable under any other law for the time being in force in India but does not include integrated tax levied under section 3 (7) and compensation cess levied under section 3 (9) of the Customs Tariff Act, 1975 and it shall be collected in the same manner as levies under section 12 of the Customs are collected. 

3.2 Compensation Cess on Imported Goods

Sub section 9 of section 3 of the Customs Tariff Act, 1975 provides that any article which is imported India shall, in addition, be liable to goods and services tax compensation cess at such rate as is levible on a like article under section 8 the Goods and Services Tax (Compensation to states) Cess Act, 2017 on its supply in India on the value of the imported article as determined under sub section 10 of section 3 of the Customs Tariff Act, 1975.

Under sub section 10 referred herein above, the value of imported article shall be the aggregate of following:

i.                    Value determined under section 14 (1) of the Customs Act, 1962 or tariff value fixed under section 14 (2) of the Customs Act, 1962; and

ii.                   Basic customs duty levied under section 12 of the Customs Act, 1962; and

iii.                 Any sum which is leviable under any other law for the time being in force in India but does not include integrated tax levied under section 3 (7) and compensation cess levied under section 3 (9) of the Customs Tariff Act, 1975 and it shall be collected in the same manner as levies under section 12 of the Customs are collected. 

3.3   Education Cess & Secondary and Higher Education Cess (SHEC) on Imported Goods

The details about these cesses are given in the CBLR Exam Guide. Till 30.6 2017, these cesses were levied on the aggregate value of the Basic Customs Duty and Additional Duty of Customs (CVD). Since Additional Duty of Customs (CVD) is subsumed in the IGST. Now, Education Cess @2% and SHEC @1% will be levied on the value of Basic Customs Duty only.

3.4 Application of the Provisions of the Customs Act, 1962 and Rules and Regulations framed thereunder to the duties, taxes and Cess chargeable under section 3 of the Customs Tariff Act, 1975

Section 3 (12) of the Customs Tariff Act, 1975 provides that:

The provisions of the Customs Act, 1962 and the rules and regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties shall, so far as may be, apply to the duty or tax or cess, as the case may be, chargeable under this section as they apply in relation to the duties leviable under that Act.

It means that in case compensation cess or integrated tax collected under aforesaid provisions are required to be refunded or needs to be demanded from the importer in case of any short levy, the provisions of the Customs Act, 1962 will apply.  

3.5 IGST Rates

Rates at which IGST is leviable on various goods for inter-state supplies are notified in Notification No 1/2017-Integrated Tax (Rate) dated 28.6.2017 and notification is available on www.cbec.gov.in 

Briefly, there are seven rates prescribed for IGST- Nil, 0.25%, 3% 5%, 12%, 18% and 28%.

The actual rate applicable to an item would depend on its classification and would be specified in Schedules notified under section 5 of the IGST Act, 2017.

The rates applicable to goods of Chapter 98 are as under:

 • 9801- Project Imports- 18%

•9802- Laboratory Chemicals- 18%

• 9803- Passenger baggage – Nil Rate

• 9804- Specified Drugs and medicines for personal use- 5%

• 9804- Other drugs and medicines for personal use- 12%

• 9804- All other dutiable goods for personal use- 28%

Likewise, different rates of tax have been notified for goods attracting Compensation Cess which is leviable on 55 item descriptions (of supply). These rates are mostly ad valorem. But some also attract either specific rates (e.g. coal) or mixed rates (ad valorem + specific) as for cigarettes. The coverage of the goods under GST compensation cess is available on CBEC website along with their HSN codes and applicable cess rates. 

3.6 Exemptions

Goods which are exempted from payment of IGST (Integrated Tax) are notified in Notification No 2/ 2017-Integrated Tax (Rate) 28.6.2017

3.7 Calculation of duties, tax and cess on imported goods

Problem 1. M/S ABC Enterprises imported a shipment of 100 tones of cement at CIF of 2000 US $. Calculate duties and taxes chargeable on goods. Rate of Basic Customs Duty is 5%; IGST is 14% ; Edu Cess @2% and SHEC@2%. 1 US$= Rs. 65

Solution

Since BCD is as percentage of value; duty will be on transaction value in terms of Section 14 (1).

Transaction Value= CIF value of goods+1% of CIF as Landing Charges

                                 =2000 US $+1%of 2000 $

                                 =2000+20=2020 US$

T.V. in Rupees       =2020X65=Rs.131300

BCD                          = Rs.131300xRateof BCD

                                 = 131300x5/100=Rs. 6565 

Education Cess

As per legal provisions, Edu. Cess is 2%of BCD

Edu cess=6565x2/100=Rs. 131.30

Secondary and Higher EduCess

As per legal provisions it is 1%of BCD

SHEC=6565X1/100=Rs 65.65

Integrated Tax (IGST)

Please read Para 3.1(iii) above for determining assessable value

Assessable value for Integrated Tax=Value under section 14+BCD under section 12 of the Customs Act, 1962+Edu cess and SHEC leviable under Finance Act

Assessable value=131300+6565+131.30+65.65

                             =138, 061.95=138062

Integrated Tax=138062x14/100

                          =19328.68

                          = Rs19329

4.    Import under Export Promotion Schemes and duty payment through EXIM scrips:

Under the GST regime, Customs duties will be exempted on imports made under export promotion schemes namely EPCG, DEEC (Advance License) and DFIA.

IGST and Compensation Cess will have to be paid on such imports.

The EXIM scrips under the export incentive schemes of chapter 3 of FTP (for example MEIS and SEIS) can be utilised only for payment of Customs duties or additional duties of Customs, on items not covered by GST, at the time of import. The scrips cannot be utilized for payment of Integrated Tax and Compensation Cess.

 Similarly, scrips cannot be used for payment of CGST, SGST or IGST for domestic procurements. 

4.1 EOUs and SEZ:

EOUs/EHTPs/STPs will be allowed to import goods without payment of basic customs duty (BCD) as well additional duties leviable under Section 3 (1) and 3(5) of the Customs Tariff Act, 1975.

GST would be leviable on the import of input goods or services or both used in the manufacture by EOUs which can be taken as input tax credit (ITC). This Input Credit or ITC can be utilized for payment of GST taxes payable on the goods cleared in the DTA or refund of unutilized ITC can be claimed under Section 54(3) of CGST Act.

In the GST regime, clearance of goods in DTA will attract GST besides payment of amount equal to BCD exemption availed on inputs used in such finished goods.

 DTA clearances of goods, which are not under GST, would attract Central Excise duties as before. 

Imports / Procurement by SEZs

Authorized operations in connection with SEZs shall be exempted from payment of IGST. Hence, there is no change in operation of the SEZ scheme. 

5.     Project Import:

Currently for items imported under project import scheme (i.e. CTH 9801), unique heading under the Central Excise Tariff, for the purposes of levy of CVD does not exist. Therefore, under the Central Excise Tariff, each item is getting classified in a heading as per its description and duty is paid on merit.

In the GST regime, for the purpose of levying IGST all the imports under the project import scheme will be classified under heading 9801 and duty shall be levied @ 18%. 

6.     Baggage:

Full exemption from IGST has been provided on passenger baggage. However, basic customs duty shall be leviable at the rate of 35% and education cess as applicable on the value which is in excess of the duty free allowances provided under the Baggage Rules, 2016. 

7.       Refunds of SAD paid on imports:

 The need for SAD refunds arose mainly on account of the fact that traders or dealers of imported goods were unable to take credit of this duty (which was a Central tax) while discharging their VAT or Sales tax liability (which was State levy) on subsequent sale of the goods. Unless corrected through a mechanism such as refund (of one of the taxes) this would have resulted in “double” payment of tax.

With the introduction of GST on 01.07.2017, credit of “eligible duties” in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock, is permissible to registered persons not liable to be registered under the existing law (for instance, VAT dealers) under transitional provisions (Section 140(3) of the CGST Act). Further, eligible duties as defined in sub-section (10) include SAD. In other words, dealers/ traders can take ITC of SAD paid on goods imported prior to 1st July 2017. Sub-section (5) of section 140 also allows a registered person to take credit of eligible duties in respect of inputs received on or after 1 July 2017 but the duty on which has been paid under the existing law. These provisions taken together ensure that SAD paid by dealers/ traders can be set-off against their GST liability as and when imported goods are supplied by them in the domestic market.

However, certain items which are out of the GST net would be eligible for SAD refunds as earlier 

8.    What is Input Tax Credit? Is it available in respect of integrated tax paid on goods imported into the country? What are conditions and restrictions?

Input Tax Credit is defined in section 2 (63) of the CGST Act, 2017 and means the credit of input tax. And input tax is defined in section 2 (62) as under:

(62) “input tax” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes—

(a) the integrated goods and services tax charged on import of goods;

(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;

(c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;

(d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or

(e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, but does not include the tax paid under the composition levy; 

In view of the above, Integrated Tax paid on the supply of imported goods is also an Input Tax and credit of this tax is available under section 16 of the CGST Act, 2017. Section 16 is reproduced below: 

16. (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

Conditions & Restrictions for availing credit

 Section 16(2) provides that,-

No registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,––

(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;

(b) he has received the goods or services or both.

(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and

(d) he has furnished the return under section 39:

 Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment:

 Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:

Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.

What are other restrictions on availing Input Tax Credit?

These are as below:

1. Section 16 (3) provides that where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed.

2. Section 16 (4) provides that a registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.

 Changes in Bill of Entry, Shipping Bill, Courier declarations

Due to changes mentioned herein above, Forms of Bill of Entry, Shipping Bill, Courier declarations have also been suitably modified. These forms are available on the CBEC website www.cbec.gov.in; and these documents are required to be filed in the new formats. Candidates appearing in the CBLR examination should familiarize themselves with these documents. They should carefully and seriously look at each and every field.   

IMPORTS

 What is importance of new Bill of Entry Format?

1.      For those who wish to claim credit of IGST paid on the imported goods at the time of import, they should declare their GSTIN i.e. their GST Registration No on the Bill of Entry. Return filed on the GSTN i.e. GST network will be cross verified with the import data in the corresponding Bill of Entry on the EDI system. If the data in the Return is not validated by the GSTN, credit will be denied.

2.      In case of importers who are not registered with the GSTN, they should declare their PAN along with their State Code as per Census of India in the Bill of Entry. This will facilitate transfer of IGST paid by the non GST importers to the consumption state. 

3.       In case of Courier imports, GSTIN for GST registered consignees and PAN Number for others has to be declared in the Bill of Entry by the courier agency wherever IGST is applicable. 

10.                       EXPORTS under GST

Section 16 of the IGST Act, 2017 provides that exports shall be zero rated supplies and exporters can claim credit of input tax for making the supplies as zero rated not withstanding that such supply may be an exempt supply.

Further, it shall be mandatory for the GST registered exporters to declare GSTIN and PAN in the shipping Bill if they wish to take refund of the integrated tax paid on the exported goods.

Section 16 further provides that registered exporter making zero rated supplies may claim refund of input tax in either of the following ways:

a.      he may supply goods or services or both under Bond or under Letter of Undertaking without payment of integrated tax  subject the conditions and procedures framed for the purpose and claim refund of unutilized input tax credit; or 

b.      he may supply goods or services or both on payment of integrated tax subject to compliance of conditions and procedure prescribed and claim refund of such tax paid.

Under the GST law, tax payers (exporters) need to file their outward supplies return inclusive of exports on the GSTN. In the said return, they will declare details of shipping bills and invoice details. Such details in regard to exports will be validated by the Customs EDI System once EGM is filed by the person in-charge of the conveyance. On the basis of such validation, refund of the integrated tax paid on the export goods shall be granted to the tax payer (exporter).

Such validation will also act as proof of export in case of zero rated supplies made under bond or under Letter of Undertaking without payment of IGST. 

Q. What is procedure for “Zero Rating” the exports?

                                                    OR

Q. What is procedure to claim refund of the IGST paid on the inputs of export goods or IGST paid on export products?

In the GST regime, the governing provisions related to exports are contained in section 16 of the Integrated Goods and Service Tax Act, 2017 (IGST Act). Supplies of goods and services for exports have been categorized as 'Zero Rated Supply' implying that goods could be exported under bond or Letter of Undertaking without payment of integrated tax followed by claim of refund of unutilized input tax credit or on payment of integrated tax with provision for refund of the tax paid.

A.    Procedure of Export

Any person making zero rated supply (i.e. any exporter) shall be eligible to claim refund under either of the following options, namely:

(a) he may supply goods or services or both under bond or Letter of Undertaking (Export under Bond), subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilized input tax credit; or

(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 (Refunds) of the Central Goods and Services Tax Act or the rules made there under (i.e. the Central Goods and Service Tax Rules, 2017).

For the option (a) above,-i. procedure to file refund has been outlined in the Central Goods and Service Tax Rules, 2017.

ii. The exporter claiming refund of unutilized input tax credit will file an application electronically through the Common Portal, either directly or through a Facilitation Centre notified by the GST Commissioner.

iv.                The application shall be accompanied by documents as prescribed in the said rules.

v.                   Application for refund shall be filed only after the export manifest or an export report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods.

vi.                 The bond or LUT for export of goods shall be furnished in the forms notified under CGST Rules, 2017.

For the option (b), the procedure is as under:

i.                    a registered person shall not be required to file any application for refund of integrated goods and services tax paid on supply of goods for exports.

ii.                  The shipping bill, having inter-alia GST invoice details, filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export;

iii.               and the applicant has furnished a valid return in FORM GSTR-3.

iv.                The details of the relevant export invoices contained in FORM GSTR-1 shall be transmitted electronically by the common portal to the Customs system and the said system shall in turn electronically transmit back to the common portal a confirmation that the goods covered by the said invoices have been exported out of India.

v.                  Upon receipt of information regarding furnishing of valid return in FORM GSTR-3 from the common portal, the Customs system shall process the claim for refund and an amount equal to the integrated tax paid in respect of each shipping bill or bill of export shall be electronically credited to the bank account of the applicant mentioned in his registration particulars.   The refund shall be governed by the provisions of the section 16 of the IGST Act.

ARE-1 procedure which was being followed is dispensed with except in respect of commodities to which provisions of Central Excise Act would continue to be applicable. 

What is Container Stuffing Procedure?

Container Stuffing Procedure

CBEC has introduced a simplified procedure for stuffing and sealing of export goods in containers as below:

It has been decided to do away with the sealing of containers with export goods by CBEC officials. Instead, self-sealing procedure shall be followed subject to the following:

1.     The exporter shall be under an obligation to inform the details of the premises where container stuffing is to be carried out, to the jurisdictional customs officer.

2.     The exporter should be registered under the GST and should be filing GSTRI and GSTR2.

3.     Where exporter is not a GST registrant, he shall bring the export goods to a Container Freight Station/Inland Container Depot for stuffing and sealing of container. However, in certain situations, an exporter may follow the self-sealing procedure even if he is not required to be registered under GST Laws. Such an exception is available to the Status Holders recognized by DGFT under a valid status holder certificate issued in this regard.

4.     Any exporter desirous of availing this procedure shall inform the jurisdictional Custom Officer of the rank of Superintendent or Appraiser of Customs, at least 15 days before the first planned movement of a consignment from his/her factory/ premises, about the intention to follow self- sealing procedure to export goods from the factory premises or warehouse.

5.     The jurisdictional Superintendent or an Appraiser or an Inspector of Customs shall visit the premises from where the export goods will be stuffed & sealed for export. The jurisdictional Superintendent or Inspector of Customs shall inspect the premises with regard to viability of stuffing of container in the premises and submit a report to the jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs within 48 hours. The jurisdictional Deputy Commissioner of Customs or as the case may be the Assistant Commissioner of Customs shall forward the proposal, in this regard to the Principal Commissioner/Commissioner of Customs who would grant permission for selfsealing at the approved premises.

6.      Once the permission is granted, the exporter shall furnish only intimation to the jurisdictional Superintendent or Customs each time self-sealing is carried out at approved premises. The intimation, in this regard shall clearly mention the place and address of the approved premises, description of export goods and whether or not any incentive is being claimed.

7.     Where the visit report of the Superintendent or an Appraiser or an Inspector of Customs regarding viability of the stuffing at the factory/ premises is not favorable, the exporter shall bring the goods to the Container Freight Station /Inland Container Depot/Port for sealing purposes.

8.     Self-Sealing permission once given by a Principal Commissioner/Commissioner of Customs shall be valid for export at all the customs stations. The customs formation granting the self-sealing permission shall circulate the permission along with GSTIN of the exporter to all Custom Houses/Station concerned.

9.     Transport document for movement of self-sealed container by an exporter from factory or warehouse shall be same as the transport document prescribed under the GST Laws. In the case of an exporter who is not a GST registrant, way bill or transport challan or lorry receipt shall be the transport document.

10.The exporter shall seal the container with the tamper proof electronic-seal of standard specification.

11. The electronic seal should have a unique number which should be declared in the Shipping Bill.

12. Before sealing the container, the exporter shall feed the data such as name of the exporter, IEC code, GSTIN number, description of the goods, tax invoice number, name of the authorized signatory (for affixing the e-seal) and Shipping Bill number in the electronic seal.

13. Thereafter, container shall be sealed with the same electronic seal before leaving the premises.

14.The exporter intending to clear export goods on self-clearance (without employing a Customs Broker) shall file the Shipping Bill under digital signature.

All consignments in self-sealed containers shall be subject to risk based criteria and intelligence, if any, for examination / inspection at the port of export. At the port/ICD as the case may be, the customs officer would verify the integrity of the electronic seals to check for tampering if any en-route.  However, random or intelligence based selection of such containers for examination/scanning would continue.

 The above revised procedure regarding sealing of containers shall be effective1.9.2017. 

Changes in the Duty Drawback Scheme 

Drawback:

No amendments have been made to the drawback provisions (Section 74 or Section 75) under Customs Act 1962 in the GST regime. Hence, the drawback scheme will continue in terms of both section 74 and section 75. 

Section 74 Duty Drawback

Section 74 of the Customs Act, 1962 provides for drawback of duties paid at time of importation when the imported goods are re-exported. Till 30.6.2017, the drawback inter alia comprised refund of basic customs duty and additional duties under Section 3 of the Customs Tariff Act (CTA), 1975.

 2. Under the GST regime, goods upon import shall be subject to integrated tax and compensation cess in terms of Sections 3(7) and 3(9) respectively of the CTA, 1975. Further, in terms of Section 3(12) of the CTA, 1975, the provisions of the Customs Act, 1962 and rules and regulations made thereunder relating inter alia to drawback shall apply to integrated tax and compensation cess also. Accordingly, drawback under Section 74 would include refund of integrated tax and compensation cess along with basic customs duty, etc.

 3. In this regard, the definition of “drawback” under Rule 2 (a) of the Re-export Rules, 1995 has been suitably amended to include refund of duty or tax or cess as referred in the CTA, 1975.

 4. In order to prevent dual benefit while sanctioning drawback under Section 74 of the Customs Act, 1962, exporter needs to furnish a certificate duly signed by the Central/State/UT GST officer, having jurisdiction over the exporter that no credit of integrated tax /compensation cess paid on imported goods has been availed or no refund of such credit or integrated tax paid on re-exported goods has been claimed.

Other provisions in respect of drawback claims under Section 74 remain unchanged 

Section 75 Drawback

 Option of All Industry Rate (AIR) as well as Brand Rate under Section 75 shall also continue. Drawback under Section 74 will refund Customs duties as well as Integrated Tax and Compensation Cess paid on imported goods which are re-exported.

At present Duty Drawback Scheme under Section 75 neutralizes Customs duty, Central excise duty and Service Tax chargeable on any imported materials or excisable materials used or taxable services used as input services in the manufacture of export goods.

 Under GST regime, Drawback under Section 75 shall be limited to Customs duties on imported inputs and Central Excise duty on items specified in Fourth Schedule to Central Excise Act 1944 (specified petroleum products, tobacco etc.) used as inputs or fuel for captive power generation.

 A transition period of three months is also being provided from date of implementation of GST i.e. 1.7.2017. During this period, existing duty drawback scheme under Section 75 shall continue. For exports during this period, exporters can claim higher rate of duty drawback (composite AIR) subject to conditions that

i.                      no input tax credit of CGST/IGST is claimed,

ii.                   no refund of IGST paid on export goods is claimed; and

iii.                  no CENVAT credit is carried forward. 

A declaration from exporter and certificate from jurisdictional GST officer in this regard has been prescribed in the notification related to AIRs. This will prevent double availement of neutralization of input taxes.

Similarly, the exporter can claim brand rate for Customs, Central Excise duties and Service Tax during this period.

 Exporters also have the option of claiming only the Customs portion of AIR and claim refund/ITC under GST laws. 

Fixation of Brand Rate under Section 75 read with Duty Drawback Rules

Brand Rate is fixed in two ways:

1.     In cases where product exported by an exporter does not figure in the category of AIR in the Drawback Schedule: Brand Rate in cases where drawback rate has not been determined is fixed under Rule 6 of the Drawback Rules, 1995 as amended due to GST Changes. This rule provides as under:

Rule 6 (1)(a) Where no amount or rate of drawback has been determined in respect of any goods, any exporter of such goods may, within three months from the date of Let Export Order or from the date exporter delivers the goods to the postal authorities in terms of sub-rule (3) of rule 5, apply to the Principal Commissioner of Customs / Commissioner of Customs, as the case having jurisdiction over the place of export, for determination of the amount or rate of drawback thereof stating all the relevant facts including the proportion in which the materials or components or input services are used in the production or manufacture of goods and the duties paid on such materials or components or the tax paid on input services:

Provided that- (i) in case an exporter is exporting the aforesaid goods from more than one place of export, he shall apply to the Principal Commissioner / Commissioner of Customs, having jurisdiction over any one of the said places of export;

(ii) the Assistant Commissioner of Customs / Deputy Commissioner of Customs may extend the aforesaid period of three months by a period of three months and the Principal Commissioner of Customs / Commissioner of Customs may further extend the period by a period of six months;

(iii) the Assistant Commissioner of Customs / Deputy Commissioner or Principal Commissioner of Customs / Commissioner of Customs, as the case may be, may on an application and after making such enquiry as he thinks fit, grant extension or refuse to grant extension after recording in writing the reasons for such refusal;

(iv) an application fee equivalent to 1% of the FOB value of expo    rts or one thousand rupees whichever is less, shall be payable for applying for grant of extension to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be and an application fee of 2% of the FOB value or two thousand rupees whichever is less, shall be payable for applying for grant of extension to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be.

Rule 6 (1)(b) On receipt of the aforesaid application, the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, shall, after making or causing to be made such inquiry as it deems fit, determine the amount or rate of drawback in respect of such goods.

Rule 6 (2) (a) An exporter if desires that he may be granted drawback provisionally, he may, while making aforesaid application apply to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, that a provisional amount be granted to him towards drawback on the export of such goods pending determination of the amount or rate of drawback.

(b) The Principal Commissioner of Customs / Commissioner of Customs may, after considering the application, allow provisionally payment of an amount not exceeding the amount claimed by the exporter in respect of such export:

 Provided that the Principal Commissioner of Customs / Commissioner of Customs may, for the purpose of allowing provisional payment of drawback in respect of such export, require the exporter to enter into a general bond for such amount, and subject to such conditions, as he may direct; or to enter into a bond for an amount not exceeding the full amount claimed by such exporter as drawback in respect of a particular consignment and binding himself, -

(i)                  to refund the amount so allowed provisionally, if for any reason, it is found that the duty drawback was not admissible; or

(ii)                 to refund the excess, if any, paid to such exporter provisionally if it is found that a lower amount was payable as duty drawback:

 Provided further that when the amount or rate of drawback payable on such goods is finally determined, the amount provisionally paid to such exporter shall be adjusted against the drawback finally payable and if the amount so adjusted is in excess or falls short of the drawback finally payable, such exporter shall repay to the Principal Commissioner of Customs / Commissioner of Customs, the excess or be entitled to the deficiency, as the case may be.

 (c) The bond referred to in clause (b) may be with such surety or security as the Principal Commissioner of Customs / Commissioner of Customs may direct.

 “Place of export” means customs station or any other place appointed for loading of export goods under section 7 of the Customs Act, 1962 (52 of 1962) from where the exporter has exported the goods or intends to export the goods in respect of which determination of amount or rate of drawback is sought.” 

2.    In cases where AIR low, Brand Rate is determined under rule 7 of the Drawback Rules, 1995 as amended. The provisions are as under:  

Rule 7(1): Where an exporter finds that the amount or rate of drawback determined under rule 3 or revised under rule 4, for the goods exported by him is less than eighty per cent. of the duties or taxes paid on the materials or components or input services used in the production or manufacture of the said goods, he may within three months from the date relevant for the applicability of the amount or rate of drawback in terms of sub-rule (3) of rule 5, make an application to the Principal Commissioner of Customs / Commissioner of Customs having jurisdiction over the place of export, for determination of the amount or rate of drawback thereof stating all relevant facts including the proportion in which the materials or components or input services are used in the production or manufacture of goods and the duties or taxes paid on such materials or components or input services:

 Provided that - (i) in case an exporter is exporting the aforesaid goods from more than one place of export, he shall apply to the Principal Commissioner or Commissioner of Customs, having jurisdiction over any one of the said places of export;

(iii)              the Assistant Commissioner of Customs / Deputy Commissioner of Customs may extend the aforesaid period of three months by a period of three months and that the Principal Commissioner of Customs / Commissioner of Customs may further extend the period by a period of six months;

(iv)              the Assistant Commissioner of Customs / Deputy Commissioner or Principal Commissioner of Customs / Commissioner of Customs may on an application and after making such enquiry as he thinks fit, grant extension or refuse to grant extension after recording in writing the reasons for such refusal;

(v)                an application fee equivalent to 1% of the FOB value of exports or one thousand rupees whichever is less, shall be payable for applying for grant of extension to the Assistant Commissioner of Customs / Deputy Commissioner of Customs and an application fee of 2% of the FOB value or two thousand rupees whichever is less, shall be payable for applying for grant of extension by the Principal Commissioner of Customs / Commissioner of Customs.

 (2) On receipt of the application referred to in sub-rule (1), the Principal Commissioner of Customs / Commissioner of Customs may after making or causing to be made such inquiry as it deems fit, allow payment of drawback to such exporter at such amount or at such rate as may be determined to be appropriate, if the amount or rate of drawback determined under rule 3 or, as the case may be, revised under rule 4, is in fact less than eighty per cent of such amount or rate determined under this sub-rule.

(3) Provisional drawback amount, as may be specified by the Central Government, shall be paid by the proper officer of Customs; and

 where the exporter desires that he may be granted further drawback provisionally, he may, while making an application under sub-rule (1), apply to the Principal Commissioner of Customs / Commissioner of Customs in the manner as has been provided in clause (a) of sub-rule (2) of rule 6 for the application made under that rule along with details of provisional drawback already paid and the grant of further provisional drawback shall be considered in the manner and subject to the conditions specified in clauses (b) and (c) of sub-rule (2), and sub-rule (3) of rule 6, subject to the condition that bond required to be executed by the claimant shall only be for the difference between amount or rate of drawback determined under rule 3 or, as the case may be, revised under rule 4 by the Central Government and the provisional drawback authorized by the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, under this rule.

 

* * * * *

Supplement to the 5th Edition of CBLR Exam Guide 

GST Changes in Customs Laws & Procedures

Introduction of GST

Central Government has w. e. f. 1.7.2017, introduced Central Goods and Services Tax (CGST) under the Central Goods and Service Tax Act, 2017 and Integrated Goods and Services Tax (IGST) under the Integrated Goods and Services Tax Act, 2017 in the country in lieu of Central Excise Duty and Central Tax respectively. With these changes, a new tax regime has emerged in the country. This new tax regime has necessitated changes in the Customs Laws and procedures also. Till 30.6.2017, imported goods in addition to basic customs duty leviable under section 12 of the Customs Act, 1962 were subject to:

i.                    Additional Duty of Customs (Counter Veiling Duty) under section 3 (1) of the Customs Tariff Act, 1975;

ii.                   Special Additional Duty of Customs (SAD 4%) under section 3 (5) of the Customs Tariff Act, 1975; and

iii.                 Education Cess &Secondary and Higher Education Cess under the Finance Act

Constitutional Amendment

The aforesaid changes have been possible only after amending the Constitution of India with 101 amendment to the constitution. This amendment Act is known as Constitution (One Hundred and First Act Amendment) Act, 2016. Now, the Article 246 A of the Constitution states as under:

"246A. (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.

(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.

Explanation.—The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council.’’

These provisions mean that Parliament and every State Legislature have power to make laws with respect to goods and services tax. But, in terms of sub clause 2, Parliament has exclusive power to make law with respect to inter State supply of goods and services or both in course of international trade or commerce. 

 So, after the aforesaid amendment, Parliament has made following laws:

I.                    CGST Act, 2017

II.                  IGST Act, 2017.

The Legislature of every State in India have made their respective SGST Act in 2017.

With effect from 1.7.2017, all imported goods shall attract,-

i.                     Integrated Goods and Services Tax as a counter veiling duty; and

ii.                    Compensation Cess wherever applicable in addition to basic custom duty but in lieu of the taxes earlier imposed other than those few goods on which excise and VAT continues to be levied.

iii.                  Education Cess and Secondary and Higher Education Cess will also be levied on the Basic Customs Duty.

Every person who is required to pay GST i.e. taxpayer should get registered in GST and take GSTIN (Goods and Service Tax Identification Number). This number is very important for the purpose of payment of GST, claiming refund etc.

What is CGST and IGST?

CGST

With effect from 1.7.2017, central excise duty which was levied on the manufactured goods at the stage of manufacture stands abolished except on Pan Masala and some Petroleum products and is replaced by the Central Goods and Services Tax which is levied by the Central Government under the CGST Act, 2017 on the intra state supplies of goods or services or both. It is a destination based tax and is also defined as Central Tax.

IGST 

As stated above, w. e. f. 1.7.2017, IGST is levied on inter-state supplies of goods or services or both under section 5 (1) of the IGST Act, 2017 except supplies of liquor for human consumption at such rate, not exceeding 40 %, as notified by the government on recommendation of the GST Council. This is referred as integrated tax. 

IGST as Counterveiling Duty

Proviso to section 5 (1) of the IGST Act, 2017 states that IGST on imported goods shall be levied and collected under section 3 of the Customs Tariff Act, 1975 on the value determined under the said Act at the point when duties of customs are levied and collected under section 12 of the Customs Act, 1962.

With the introduction of IGST, SAD 4 % levied under section 3 (5) of the Customs Tariff Act, 1975 also stands abolished in addition to Additional duty of Customs levied under section 3 (1) of the Customs Tariff Act, 1975. These duties were levied to create a level playing field for the domestic goods. Now, this role will be played by the IGST

Integrated Tax (IGST)

Integrated tax on imported goods is levied under sub section (7) of section 3 of the Customs Tariff Act, 1975. This sub-section provides that any article which is imported into India shall, in addition, be liable to integrated tax at such rate not exceeding 40 % as is leviable under section 5 of the IGST Act, 1975 on a like article on its supply in India on the value determined under sub section 8.

Sub section 8 of section 3 provides that for the purpose of calculating integrated tax on an imported article where it is levied as a percentage of the value, the value shall be aggregate of the following:

i.                    Value determined under section 14 (1) of the Customs Act, 1962 or tariff value fixed under section 14 (2) of the Customs Act, 1962; and

ii.                   Basic customs duty levied under section 12 of the Customs Act, 1962; and

iii.                 Any sum which is leviable under any other law for the time being in force in India but does not include integrated tax levied under section 3 (7) and compensation cess levied under section 3 (9) of the Customs Tariff Act, 1975 and it shall be collected in the same manner as levies under section 12 of the Customs are collected.

Application of the provisions of CGST Act, 2017

The IGST Act, 2017 depends on certain provisions of the CGST Act, 2017 in relation to certain operations under the Act. The provisions of section 20 of the IGST Act, 2017 state that subject to the provisions of this Act and the rules made thereunder, the provisions of Central Goods and Services Tax Act relating to,––

(i)                  scope of supply;

(ii)                composite supply and mixed supply;

(iii)               time and value of supply;

(iv)               input tax credit;

(v)                 registration;

(vi)              tax invoice, credit and debit notes;

(vii)            accounts and records;

(viii)          returns, other than late fee;

(ix)              payment of tax;

(x)                tax deduction at source;

(xi)               tax collection at source

(xii)            assessment;

(xiii)           refunds;

(xiv)            audit;

(xv)             inspection, search, seizure and arrest;

(xvi)          demands and recovery;

(xvii)          liability to pay in certain cases;

(xviii)        advance ruling;

(xix)            appeals and revision;

(xx)             presumption as to documents;

(xxi)            offences and penalties;

(xxii)          job work;

(xxiii)       electronic commerce;

(xxiv)        transitional provisions; and

(xxv)         (xxv) miscellaneous provisions including the provisions relating to the imposition of interest and penalty, shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to central tax as if they are enacted under this Act: 

Provided that in the case of tax deducted at source, the deductor shall deduct tax at the rate of two per cent from the payment made or credited to the supplier: 

Provided further that in the case of tax collected at source, the operator shall collect tax at such rate not exceeding two per cent, as may be notified on the recommendations of the Council, of the net value of taxable supplies: 

 Provided also that for the purposes of this Act, the value of a supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier: 

 Provided also that in cases where the penalty is leviable under the Central Goods and Services Tax Act and the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, the penalty leviable under this Act shall be the sum total of the said penalties. 

Compensation Cess

Sub section 9 of section 3 of the Customs Tariff Act, 1975 provides that any article which is imported India shall, in addition, be liable to goods and services tax compensation cess at such rate as is levible on a like article under section 8 the Goods and Services Tax (Compensation to states) Cess Act, 2017 on its supply in India on the value of the imported article as determined under sub section 10 of section 3 of the Customs Tariff Act, 1975.

Under sub section 10 referred herein above, the value of imported article shall be the aggregate of following:

i.                    Value determined under section 14 (1) of the Customs Act, 1962 or tariff value fixed under section 14 (2) of the Customs Act, 1962; and

ii.                   Basic customs duty levied under section 12 of the Customs Act, 1962; and

iii.                 Any sum which is leviable under any other law for the time being in force in India but does not include integrated tax levied under section 3 (7) and compensation cess levied under section 3 (9) of the Customs Tariff Act, 1975 and it shall be collected in the same manner as levies under section 12 of the Customs are collected. 

Application of the other Acts

Like IGST Act, 2017, this Act also depends on certain provisions of IGST Act, 2017 and CGST Act, 2017 for its certain operations. Section 11 of this Act provides as under:

11. (1) The provisions of the Central Goods and Services Tax Act, and the rules made thereunder, including those relating to assessment, input tax credit, non-levy, short-levy, interest, appeals, offences and penalties, shall, as far as may be, mutatis mutandis, apply, in relation to the levy and collection of the cess leviable under section 8 on the intra-State supply of goods and services, as they apply in relation to the levy and collection of central tax on such intra-State supplies under the said Act or the rules made thereunder.

(2) The provisions of the Integrated Goods and Services Tax Act, and the rules made thereunder, including those relating to assessment, input tax credit, non-levy, short-levy, interest, appeals, offences and penalties, shall, mutatis mutandis, apply in relation to the levy and collection of the cess leviable under section 8 on the inter-State supply of goods and services, as they apply in relation to the levy and collection of integrated tax on such inter-State supplies under the said Act or the rules made thereunder: Provided that the input tax credit in respect of cess on supply of goods and services leviable under section 8, shall be utilised only towards payment of said cess on supply of goods and services leviable under the said section.

IGST Rates

Rates at which IGST is leviable on various goods for inter-state supplies are notified in Notification No 1/2017-Integrated Tax (Rate) dated 28.6.2017 and notification is available on www.cbec.gov.in

Briefly, there are seven rates prescribed for IGST- Nil, 0.25%, 3% 5%, 12%, 18% and 28%.

 

The actual rate applicable to an item would depend on its classification and would be specified in Schedules notified under section 5 of the IGST Act, 2017.

The rates applicable to goods of Chapter 98 are as under:

 • 9801- Project Imports- 18%

•9802- Laboratory Chemicals- 18%

• 9803- Passenger baggage – Nil Rate

• 9804- Specified Drugs and medicines for personal use- 5%

• 9804- Other drugs and medicines for personal use- 12%

• 9804- All other dutiable goods for personal use- 28%

Likewise, different rates of tax have been notified for goods attracting Compensation Cess which is leviable on 55 item descriptions (of supply). These rates are mostly ad valorem. But some also attract either specific rates (e.g. coal) or mixed rates (ad valorem + specific) as for cigarettes. The coverage of the goods under GST compensation cess is available on CBEC website along with their HSN codes and applicable cess rates.  

Exemptions

Goods which are exempted from payment of GST are notified in Notification No 2/ 2017-Integrated Tax (Rate) 28.6.2017 

Import under Export Promotion Schemes and duty payment through EXIM scrips:

Under the GST regime, Customs duties will be exempted on imports made under export promotion schemes namely EPCG, DEEC (Advance License) and DFIA.

IGST and Compensation Cess will have to be paid on such imports.

The EXIM scrips under the export incentive schemes of chapter 3 of FTP (for example MEIS and SEIS) can be utilised only for payment of Customs duties or additional duties of Customs, on items not covered by GST, at the time of import. The scrips cannot be utilized for payment of Integrated Tax and Compensation Cess.

 Similarly, scrips cannot be used for payment of CGST, SGST or IGST for domestic procurements. 

EOUs and SEZ:

EOUs/EHTPs/STPs will be allowed to import goods without payment of basic customs duty (BCD) as well additional duties leviable under Section 3 (1) and 3(5) of the Customs Tariff Act.

GST would be leviable on the import of input goods or services or both used in the manufacture by EOUs which can be taken as input tax credit (ITC). This Input Credit or ITC can be utilized for payment of GST taxes payable on the goods cleared in the DTA or refund of unutilized ITC can be claimed under Section 54(3) of CGST Act.

In the GST regime, clearance of goods in DTA will attract GST besides payment of amount equal to BCD exemption availed on inputs used in such finished goods.

 DTA clearances of goods, which are not under GST, would attract Central Excise duties as before. 

Imports / Procurement by SEZs

Authorized operations in connection with SEZs shall be exempted from payment of IGST. Hence, there is no change in operation of the SEZ scheme. 

 Project Import:

Currently for items imported under project import scheme (i.e. CTH 9801), unique heading under the Central Excise Tariff, for the purposes of levy of CVD does not exist. Therefore, under the Central Excise Tariff, each item is getting classified in a heading as per its description and duty is paid on merit.

In the GST regime, for the purpose of levying IGST all the imports under the project import scheme will be classified under heading 9801 and duty shall be levied @ 18%. 

 Baggage:

Full exemption from IGST has been provided on passenger baggage. However, basic customs duty shall be leviable at the rate of 35% and education cess as applicable on the value which is in excess of the duty free allowances provided under the Baggage Rules, 2016. 

Refunds of SAD paid on imports:

 The need for SAD refunds arose mainly on account of the fact that traders or dealers of imported goods were unable to take credit of this duty (which was a Central tax) while discharging their VAT or Sales tax liability (which was State levy) on subsequent sale of the goods. Unless corrected through a mechanism such as refund (of one of the taxes) this would have resulted in “double” payment of tax.

With the introduction of GST on 01.07.2017, credit of “eligible duties” in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock, is permissible to registered persons not liable to be registered under the existing law (for instance, VAT dealers) under transitional provisions (Section 140(3) of the CGST Act). Further, eligible duties as defined in sub-section (10) include SAD. In other words, dealers/ traders can take ITC of SAD paid on goods imported prior to 1 st July 2017. Sub-section (5) of section 140 also allows a registered person to take credit of eligible duties in respect of inputs received on or after 1 July 2017 but the duty on which has been paid under the existing law. These provisions taken together ensure that SAD paid by dealers/ traders can be set-off against their GST liability as and when imported goods are supplied by them in the domestic market.

However, certain items which are out of the GST net would be eligible for SAD refunds as earlier 

What is Input Tax Credit? Is it available in respect of integrated tax paid on goods imported into the country?

Input Tax Credit is defined in section 2 (63) of the CGST Act, 2017 and means the credit of input tax. And input tax is defined in section 2 (62) as under:

(62) “input tax” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes—

(a) the integrated goods and services tax charged on import of goods;

(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;

(c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;

(d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or

(e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, but does not include the tax paid under the composition levy; 

In view of the above, Integrated Tax paid on the supply of imported goods is also a Input Tax and credit of this tax is available under section 16 of the CGST Act., 2017. The Section 16 is reproduced below: 

16. (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,––

(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;

(b) he has received the goods or services or both.

 Explanation.—For the purposes of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;\

(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and

(d) he has furnished the return under section 39:

 Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment:

 Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:

Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.

(3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed.

(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. 

In which manner Input Tax Credit can be utilized? OR

 How the CGST or IGST is to be paid?

The payment of CGST or IGST has to be made in the manner provided in section 49 of the CGST Act, 2017. The provisions of said section 49 provide as under:

(43) “electronic cash ledger” means the electronic cash ledger referred to in subsection (1) of section 49) 

49. (1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed.

(2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41, to be maintained in such manner as may be prescribed.

(3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed.

(4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed.

(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of––

(a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;

(b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;

(c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

(d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

(e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and (f) the State tax or Union territory tax shall not be utilised towards payment of central tax.

(6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54.

(7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed.

(8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely:––

(a) self-assessed tax, and other dues related to returns of previous tax periods;

(b) self-assessed tax, and other dues related to the return of the current tax period;

(c) any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74.

(9) Every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both.

Explanation.––For the purposes of this section,— (a) the date of credit to the account of the Government in the authorised bank shall be deemed to be the date of deposit in the electronic cash ledger;

(b) the expression,— (i) “tax dues” means the tax payable under this Act and does not include interest, fee and penalty; and

(ii) “other dues” means interest, penalty, fee or any other amount payable under this Act or the rules made thereunder. 

Changes in Bill of Entry, Shipping Bill, Courier declarations

Due to changes mentioned herein above, Forms of Bill of Entry, Shipping Bill, Courier declarations have also been suitably modified. These forms are available on the CBEC website www.cbec.gov.in; and these documents are required to be filed in the new formats. Candidates appearing in the CBLR examination should familiarize themselves with these documents. They should carefully and seriously look at each and every field.   

IMPORTS

 What is importance of new Bill of Entry Format?

1.      For those who wish to claim credit of IGST paid on the imported goods at the time of import, they should declare their GSTIN i.e. their GST Registration No on the Bill of Entry. Return filed on the GSTN i.e. GST network will be cross verified with the import data in the corresponding Bill of Entry on the EDI system. If the data in the Return is not validated by the GSTN, credit will be denied.

2.      In case of importers who are not registered with the GSTN, they should declare their PAN along with their State Code as per Census of India in the Bill of Entry. This will facilitate transfer of IGST paid by the non GST importers to the consumption state. 

3.       In case of Courier imports, GSTIN for GST registered consignees and PAN Number for others has to be declared in the Bill of Entry by the courier agency wherever IGST is applicable. 

EXPORTS under GST

Section 16 of the IGST Act, 2017 provides that exports shall be zero rated supplies and exporters can claim credit of input tax for making the supplies as zero rated not withstanding that such supply may be an exempt supply.

It shall be mandatory for the GST registered exporters to declare GSTIN and PAN in the shipping Bill if they wish to take refund of the integrated tax paid on the exported goods.

Section 16 further provides that registered exporter making zero rated supplies may claim refund of input tax in either of the following ways:

a.      he may supply goods or services or both under Bond or under Letter of Undertaking without payment of integrated tax  subject the conditions and procedures framed for the purpose and claim refund of unutilized input tax credit; or 

b.      he may supply goods or services or both on payment of integrated tax subject to compliance of conditions and procedure prescribed and claim refund of such tax paid.

Under the GST law, tax payers (exporters) need to file their outward supplies return inclusive of exports on the GSTN. In the said return, they will declare details of shipping bills and invoice details. Such details in regard to exports will be validated by the Customs EDI System once EGM is filed by the person in-charge of the conveyance. On the basis of such validation, refund of the integrated tax paid on the export goods shall be granted to the tax payer (exporter).

Such validation will also act as proof of export in case of zero rated supplies made under bond or under Letter of Undertaking without payment of IGST.   

Changes in the Duty Drawback Scheme 

Drawback:

No amendments have been made to the drawback provisions (Section 74 or Section 75) under Customs Act 1962 in the GST regime. Hence, the drawback scheme will continue in terms of both section 74 and section 75. 

Section 74 Duty Drawback

Section 74 of the Customs Act, 1962 provides for drawback of duties paid at time of importation when the imported goods are re-exported. Till 30.6.2017, the drawback inter alia comprised refund of basic customs duty and additional duties under Section 3 of the Customs Tariff Act (CTA), 1975.

 2. Under the GST regime, goods upon import shall be subject to integrated tax and compensation cess in terms of Sections 3(7) and 3(9) respectively of the CTA, 1975. Further, in terms of Section 3(12) of the CTA, 1975, the provisions of the Customs Act, 1962 and rules and regulations made thereunder relating inter alia to drawback shall apply to integrated tax and compensation cess also. Accordingly, drawback under Section 74 would include refund of integrated tax and compensation cess along with basic customs duty, etc.

 3. In this regard, the definition of “drawback” under Rule 2 (a) of the Re-export Rules, 1995 has been suitably amended to include refund of duty or tax or cess as referred in the CTA, 1975.

 4. In order to prevent dual benefit while sanctioning drawback under Section 74 of the Customs Act, 1962, exporter needs to furnish a certificate duly signed by the Central/State/UT GST officer, having jurisdiction over the exporter that no credit of integrated tax /compensation cess paid on imported goods has been availed or no refund of such credit or integrated tax paid on re-exported goods has been claimed.

Other provisions in respect of drawback claims under Section 74 remain unchanged 

Section 75 Drawback

 Option of All Industry Rate (AIR) as well as Brand Rate under Section 75 shall also continue. Drawback under Section 74 will refund Customs duties as well as Integrated Tax and Compensation Cess paid on imported goods which are re-exported.

At present Duty Drawback Scheme under Section 75 neutralises Customs duty, Central excise duty and Service Tax chargeable on any imported materials or excisable materials used or taxable services used as input services in the manufacture of export goods.

 Under GST regime, Drawback under Section 75 shall be limited to Customs duties on imported inputs and Central Excise duty on items specified in Fourth Schedule to Central Excise Act 1944 (specified petroleum products, tobacco etc.) used as inputs or fuel for captive power generation.

 A transition period of three months is also being provided from date of implementation of GST i.e. 1.7.2017. During this period, existing duty drawback scheme under Section 75 shall continue. For exports during this period, exporters can claim higher rate of duty drawback (composite AIR) subject to conditions that

i.                      no input tax credit of CGST/IGST is claimed,

ii.                   no refund of IGST paid on export goods is claimed; and

iii.                  no CENVAT credit is carried forward. 

A declaration from exporter and certificate from jurisdictional GST officer in this regard has been prescribed in the notification related to AIRs. This will prevent double availement of neutralisation of input taxes.

Similarly, the exporter can claim brand rate for Customs, Central Excise duties and Service Tax during this period.

 Exporters also have the option of claiming only the Customs portion of AIR and claim refund/ITC under GST laws. 

Refund of IGST paid on exports and Export under Bond scheme:

Under GST regime exports would be considered as zero-rated supply. Any person making zero rated supply (i.e. any exporter) shall be eligible to claim refund under either of the following options, namely: –– (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of un-utilized input tax credit; or

(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 (Refunds) of the Central Goods and Services Tax Act or the rules made there under (i.e Refund Rules 2017).

For the option (a), procedure to file refund is outlined in the Refund Rules under GST. The exporter claiming refund of IGST will file an application electronically through the Common Portal, either directly or through a Facilitation Centre notified by the GST Commissioner.

The application shall be accompanied by documentary evidences as prescribed in the said rules. Application for refund shall be filed only after the export manifest or an export report, as the case may be, is delivered under section 41 of the Customs Act, 1962 in respect of such goods.

For the option (b), the shipping bill filed by an exporter shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when the person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export and the applicant has furnished a valid return.

For both option (a) and (b) exporters have to provide details of GST invoice in the Shipping bill. ARE-1 which is being submitted presently shall be dispensed with except in respect of commodities to which provisions of Central Excise Act would continue to be applicable. 

Fixation of Brand Rate under Section 75 read with Duty Drawback Rules

Brand Rate is fixed in two ways:

1.     In cases where product exported by an exporter does not figure in the category of AIR in the Drawback Schedule: Brand Rate in cases where drawback rate has not been determined is fixed under Rule 6 of the Drawback Rules, 1995 as amended due to GST Changes. This rule provides as under:

Rule 6 (1)(a) Where no amount or rate of drawback has been determined in respect of any goods, any exporter of such goods may, within three months from the date of Let Export Order or from the date exporter delivers the goods to the postal authorities in terms of sub-rule (3) of rule 5, apply to the Principal Commissioner of Customs / Commissioner of Customs, as the case having jurisdiction over the place of export, for determination of the amount or rate of drawback thereof stating all the relevant facts including the proportion in which the materials or components or input services are used in the production or manufacture of goods and the duties paid on such materials or components or the tax paid on input services:

Provided that- (i) in case an exporter is exporting the aforesaid goods from more than one place of export, he shall apply to the Principal Commissioner / Commissioner of Customs, having jurisdiction over any one of the said places of export;

(ii) the Assistant Commissioner of Customs / Deputy Commissioner of Customs may extend the aforesaid period of three months by a period of three months and the Principal Commissioner of Customs / Commissioner of Customs may further extend the period by a period of six months;

(iii) the Assistant Commissioner of Customs / Deputy Commissioner or Principal Commissioner of Customs / Commissioner of Customs, as the case may be, may on an application and after making such enquiry as he thinks fit, grant extension or refuse to grant extension after recording in writing the reasons for such refusal;

(iv) an application fee equivalent to 1% of the FOB value of expo    rts or one thousand rupees whichever is less, shall be payable for applying for grant of extension to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be and an application fee of 2% of the FOB value or two thousand rupees whichever is less, shall be payable for applying for grant of extension to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be.

Rule 6 (1)(b) On receipt of the aforesaid application, the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, shall, after making or causing to be made such inquiry as it deems fit, determine the amount or rate of drawback in respect of such goods.

Rule 6 (2) (a) An exporter if desires that he may be granted drawback provisionally, he may, while making aforesaid application apply to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, that a provisional amount be granted to him towards drawback on the export of such goods pending determination of the amount or rate of drawback.

(b) The Principal Commissioner of Customs / Commissioner of Customs may, after considering the application, allow provisionally payment of an amount not exceeding the amount claimed by the exporter in respect of such export:

 Provided that the Principal Commissioner of Customs / Commissioner of Customs may, for the purpose of allowing provisional payment of drawback in respect of such export, require the exporter to enter into a general bond for such amount, and subject to such conditions, as he may direct; or to enter into a bond for an amount not exceeding the full amount claimed by such exporter as drawback in respect of a particular consignment and binding himself, -

(i)                  to refund the amount so allowed provisionally, if for any reason, it is found that the duty drawback was not admissible; or

(ii)                 to refund the excess, if any, paid to such exporter provisionally if it is found that a lower amount was payable as duty drawback:

 Provided further that when the amount or rate of drawback payable on such goods is finally determined, the amount provisionally paid to such exporter shall be adjusted against the drawback finally payable and if the amount so adjusted is in excess or falls short of the drawback finally payable, such exporter shall repay to the Principal Commissioner of Customs / Commissioner of Customs, the excess or be entitled to the deficiency, as the case may be.

 (c) The bond referred to in clause (b) may be with such surety or security as the Principal Commissioner of Customs / Commissioner of Customs may direct.

 “Place of export” means customs station or any other place appointed for loading of export goods under section 7 of the Customs Act, 1962 (52 of 1962) from where the exporter has exported the goods or intends to export the goods in respect of which determination of amount or rate of drawback is sought.” 

2.    In cases where AIR low, Brand Rate is determined under rule 7 of the Drawback Rules, 1995 as amended. The provisions are as under:  

Rule 7(1): Where an exporter finds that the amount or rate of drawback determined under rule 3 or revised under rule 4, for the goods exported by him is less than eighty per cent. of the duties or taxes paid on the materials or components or input services used in the production or manufacture of the said goods, he may within three months from the date relevant for the applicability of the amount or rate of drawback in terms of sub-rule (3) of rule 5, make an application to the Principal Commissioner of Customs / Commissioner of Customs having jurisdiction over the place of export, for determination of the amount or rate of drawback thereof stating all relevant facts including the proportion in which the materials or components or input services are used in the production or manufacture of goods and the duties or taxes paid on such materials or components or input services:

 Provided that - (i) in case an exporter is exporting the aforesaid goods from more than one place of export, he shall apply to the Principal Commissioner or Commissioner of Customs, having jurisdiction over any one of the said places of export;

(iii)              the Assistant Commissioner of Customs / Deputy Commissioner of Customs may extend the aforesaid period of three months by a period of three months and that the Principal Commissioner of Customs / Commissioner of Customs may further extend the period by a period of six months;

(iv)              the Assistant Commissioner of Customs / Deputy Commissioner or Principal Commissioner of Customs / Commissioner of Customs may on an application and after making such enquiry as he thinks fit, grant extension or refuse to grant extension after recording in writing the reasons for such refusal;

(v)                an application fee equivalent to 1% of the FOB value of exports or one thousand rupees whichever is less, shall be payable for applying for grant of extension to the Assistant Commissioner of Customs / Deputy Commissioner of Customs and an application fee of 2% of the FOB value or two thousand rupees whichever is less, shall be payable for applying for grant of extension by the Principal Commissioner of Customs / Commissioner of Customs.

 (2) On receipt of the application referred to in sub-rule (1), the Principal Commissioner of Customs / Commissioner of Customs may after making or causing to be made such inquiry as it deems fit, allow payment of drawback to such exporter at such amount or at such rate as may be determined to be appropriate, if the amount or rate of drawback determined under rule 3 or, as the case may be, revised under rule 4, is in fact less than eighty per cent of such amount or rate determined under this sub-rule.

(3) Provisional drawback amount, as may be specified by the Central Government, shall be paid by the proper officer of Customs; and

 where the exporter desires that he may be granted further drawback provisionally, he may, while making an application under sub-rule (1), apply to the Principal Commissioner of Customs / Commissioner of Customs in the manner as has been provided in clause (a) of sub-rule (2) of rule 6 for the application made under that rule along with details of provisional drawback already paid and the grant of further provisional drawback shall be considered in the manner and subject to the conditions specified in clauses (b) and (c) of sub-rule (2), and sub-rule (3) of rule 6, subject to the condition that bond required to be executed by the claimant shall only be for the difference between amount or rate of drawback determined under rule 3 or, as the case may be, revised under rule 4 by the Central Government and the provisional drawback authorized by the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, under this rule.

 

 

PREFAFCE

 

Dear Readers,

It gives us great pleasure in launching the 5th edition of this book. We thank all the readers and welcome the great response received from different stakeholders such as candidates appearing in CBLR examination, Customs Brokers Associations, Customs Brokers, Courier and freight forwarding firms. The book has been in demand throughout the year and we are happy to have helped candidates in clearing the CBLR exam.

We really feel unbelievable pleasure in stating that it gives us a great sense of achievement and satisfaction when candidates ring up from all over the country to tell us that they have cleared both the written and oral examination by preparing only from our book. It is a great feeling and you feel it when you hear such a message from individuals who are not known to you but simply want you to be an important partner in their success story.

We also take pleasure in stating that Customs Brokers Associations like BCHAA have used this book for preparing candidates of their members for the CBLR examination. As the book is written in simple language to convey meanings of complex legal provisions effectively, it has been used for training purposes to enhance skills of employees working in various firms.  

As customs environment is very dynamic and is constantly changing to meet the aspirations of trade, industry and community in general, it necessitates to incorporates required changes in the book also so that it is up to date and meets your current needs. Accordingly, we are introducing fifth edition of the book to you.

The new edition has been updated and changes introduced by the Finance Act, 2016 are appropriately incorporated in this book. We will also like to mention that whereas in our first edition, the emphasis was to enable the candidates to pass the CBLR examination; now our objective is not only to prepare you for this purpose but also to give you enough expertise to manage and handle various issues that crop up in day to day working. Therefore, we have made some additions in relevant topics. We are very sure; candidates for the CBLR examination and members of the industry will find the change very useful. Besides, looking to the demand of the candidates, previous years’ question papers are also added in this book. This will help them in better preparation.

And, we reiterate that this book is not a great commercial venture for us but it is our pure and humble mission to help young people in their entrepreneurial drive to have own start- ups or to help people in starting new verticals in their existing business and to enable the industry in correct legal compliance.

With the above back drop, we hand over the book to you and will be grateful for suggestions.

And lastly, this edition is dedicated to my late mom who had been a great contributor in shaping my life and to my dear wife who always gives me enough time for writing.   

 

K R Bhargava

Former, Chief Commissioner, Customs, Nhava Sheva, Mumbai

 

Gaurav Bhargava

Masters in International Business

------------------------     

 

Preface to 5th Edition

This gives us immense pleasure to record that last edition of this book has been a great success. We are grateful to all those who interacted with us and also gave their valuable comments/suggestions in regard to this book.

Accordingly, we have updated the book in terms of recent changes made in law and procedures and also keeping in mind the trend being followed in various commissionerates in setting the question papers. We have retained the original framework of the book but added enough extra material in question-answer format to make it comprehensive and examinee friendly.

We may state that syllabus of G card examination is wide and examinees are expected to be well versed in customs procedures with minute basic details in documentation. We have attempted to add extra material in the form of Annexures so that it is easy for all candidates to prepare well for the examination. We have also attempted to keep the language as simple as possible so that book continues to be candidate friendly.

We are confident that the book will be a great help not only in successfully passing the examination but also equipping the candidates with adequate knowledge to advance and perform well in their professional career. We request all those who read the book to give their feedback; this will be a great help.

We express our thanks to our family members, particularly Mrs Bhragava to encourage and enable to write this book.

The book is dedicated to my parents who have always been inspiring.

Authors

K R Bhargava, Former Chief Commissioner, Customs

Gaurav Bhargava, Masters in International Business

-------------------------

 

Dear Candidate,

Please accept our heartiest congratulations on clearing the written CBLR examination. It is your hard work and devotion to your dream that has given you the cause to smile. Now, before you, there is next step to climb and we are sure nothing is difficult for human effort. If a committed people can climb Mount Everest, surely you can cross this hurdle too; provided you are focused, strategic and live with your dream to make it realize.

To help you, based on our experience, we have brought out Oral Test Exam Guide. The book is meant to give you a thorough understanding of the oral exam format and prepare you for succeeding in the interview.

Whereas in the written exam, you have freedom to select and answer a question in your own way and in your own time, this liberty is not available while you are facing the oral test being conducted by three Commissioners of Customs. Time is limited; answer has to be structured and communication too should be excellent and full of confidence.

We have authored the book in a format that will help you to easily cover the course and to understand how interview proceeds. Just to give example, we quote few questions:

Q. 1: How do you define a Customs Broker?

A. 1:  Sir; Customs Broker means a person who is licenced under CBLR, 2013 to transact business relating to import and export of goods or departure and entry of conveyance at a customs station.

Q. 1A: Why do you want to become a Customs Broker; you are already a lawyer, senior manager in a corporate or independent professional?

A. 1A: [This Answer will vary from candidate to candidate. But think of a good convincing answer or contact us on +91 97 1666 2 999.]

Q. 2: In case you pass this exam and get your Customs Broker’s licence will you be able to transfer, rent out or sell the licence to another person?

A. 2: No; it is prohibited under regulation 10 of CBLR, 2013. Licence granted to a person is specific to the person to whom it is granted. It is non- transferable.

Q. 3: Can the licence be suspended?

A. 3: Yes; it can be suspended under regulation 19 in appropriate cases where Commissioner considers that immediate action is necessary and enquiry is contemplated or is pending under CBLR, 2013 against the Customs Broker.

Q. 3A: Can the licence be revoked also?

A. 3A: Yes; under regulation 20 it can be revoked also.

Q. 4: Are you aware of the obligations of a customs broker?

A. 4: Yes.

Q. 4A: What are those and what is impact if these are not fulfilled?

Q. 5 -------------

For a copy of the book, send a mail to kuldiprbhargava@gmail.com or gb.gauravbhargava@gmail.com  or sms your message with postal address on +91 97 1666 2 999 or +91 99588 03166 or +91 97 1 666 2 991 or +91 96 500 59 113. We will provide you the bank details for online payment or NEFT.

Thanks

K R Bhargava

Author,

And finally, all the best wishes.

 

 

CBLR MOCK TESTS

Dear Candidate

In order to Test your Written Exam Preparation for the upcoming Rule 6 exam, make use of our Mock Test Series. The tests are based on the Exam Pattern of CBLR and will give you necessary writing practice before the actual exam.

A set of 5 Test Papers based on the actual CBLR Exam Pattern made as close as possible to the actual test pattern by Mr KR Bhargava.

Each test has to be attempted within the time limit and the answer sheets have to be sent to us for Evaluation. After evaluation we will give required feedback in order to improve the score. 

Make use of the CBLR MOCK TESTS

1.    To test the current preparation level

2.    To understand improvement required

3.    To see whether progress is being made test by test in scores

4.    To thoroughly revise the syllabus

5.    To practice extensively on answer writing skills

6.    To practice completing the exam in the required time

To Purchase

Please send requisition on bhargavabooks@gmail.com  and send your complete delivery address while ordering. Please make payment via NEFT to the following bank account.

To Pay

Bank details for NEFT/Deposit.

Andhra Bank

Bank: Andhra Bank, Branch: Sushant Lok 2, Sector 57, Gurgaon

IFSC: andb0001596, S AC: 159611100001352

Beneficiary: Bhargava Books

Price: Rs 1,700 

 

 

MOCK TEST NO. 5

Customs Brokers Examination, 2016

Total Marks: 100

Pass Marks: 50

Instructions

1.   Question No. 1 is compulsory

2.   Attempt any 4 from the remaining questions

3.   Quote Authority, whenever necessary. In support of your answer. More weightage will be given to the answers which are quoted with authority.

4.   Write each answer on separate page

 

Q1. Write short notes on any four of the following:

a.    Section 12 of the Customs Act, 1962

b.   Baggage Rules

c.    Prohibited goods and consequences of import thereof

d.   Transhipment

e.    Temporary imports for the purpose of exhibitions, trade fairs, etc.

5 X 4 Marks

Q2. What is anti-dumping duty and at what rate it is levied? What are the circumstances and what is the procedure to levy anti-dumping duty? What happens if notification imposing provisional anti-dumping duty lapses?

10 + 5 + 5 Marks

Q3. What is provisional assessment? Under what conditions customs officer can resort to it? What is procedure thereof? In what manner, provisional assessment is judiciously finalised?

20 Marks

 

 

 

DISTANT COACHING PROGRAM FOR CUSTOMS BROKERS EXAMINATION-2016

Statement of Objectives

Primary Objective:

India’s growing international trade needs skilled manpower to manage legal compliance correctly, efficiently and at lower transaction cost at international ports, Land Customs Stations, Inland Container Depots etc. when goods pass through customs area. Enabling to fulfil this need is our primary objectives.   

Secondary Objectives:

1.       To enable EXIM firms to develop talented and skilled pool of executives who can manage Customs Legal Compliance correctly, legally and efficiently.

2.       To enable talented, educated and enterprising individuals to  start Customs Clearance Businesses

Strategy:

Impart adequate knowledge of Customs &other Border Control Laws and procedures to individuals and nominees of firms and prepare them not only to successfully compete in the Customs Brokers Examination, 2016 but also practice as a Customs Brokers   

Execution Plan:

i.                     Supply Study Material in simple language, explaining legal provisions and procedures

ii.                   Explain reading methodology

iii.                  Train in documentation

iv.                 Adequate Assignment Work and Export-Import Problems for Solutions

v.                   Feedback on Assignments

vi.                 One to one Discussions on identified problems using email, phone or skype between 7 pm to 9 pm on Saturdays and Sundays

vii.                Mid Term & Final Practice Papers

viii.              Expected Question Papers & solutions thereto

Timings & Duration

Programme will be for 4 months; two Batches; First Batch starts on 16th of June, 2015

And Second Batch starts on 16th July 2015

Registration Fee & Course Fee

Registration Fee Rs 2000 which is adjustable towards total Course Fee of Rs. 10,000 plus Service Tax

Faculty

K R Bhargava, Chief Commissioner, Customs (Retd) & Associates

Contact:

Bhargava Books

Phone:  9716662999 / 9716662991 / 9958803166

Email: bhargavabooks@gmail.com  /   kuldiprbhargava@gmail.com  

Office Address: F-367, First Floor. Sector -57. Sushant Lok-2 Gurgaon 122002 (Haryana)

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