7 Idt Amendments-May Nov 2019 PDF

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Amended Provisions of IDT for MAY / NOV 2019 Farooq Haque Classes
IDT
Amendments for
MAY / NOV 2019
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Part 1: GST
Section 9: Levy of Central goods and service tax [CGST]
(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the
central goods and services tax on all intra-State supplies of goods or services or
both, except on the supply of alcoholic liquor for human consumption, on the value
determined under section 15 and at such rates, not exceeding twenty per cent., as
may be notified by the Government on the recommendations of the Council and
collected in such manner as may be prescribed and shall be paid by the taxable
person.
(2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas and aviation turbine fuel shall be levied
with effect from such date as may be notified by the Government on the
recommendations of the Council.
(3) The Government may, on the recommendations of the Council, by notification,

specify categories of supply of goods or services or both, the tax on which shall be
paid on reverse charge basis by the recipient of such goods or services or both
and all the provisions of this Act shall apply to such recipient as if he is the person
liable for paying the tax in relation to the supply of such goods or services or both
(4) The central tax in respect of the supply of taxable goods or services or both by a
supplier, who is not registered, to a registered person shall be paid by such person
on reverse charge basis as the recipient and all the provisions of this Act shall
apply to such recipient as if he is the person liable for paying the tax in relation to
the supply of such goods or services or both. [However, this provision (of reverse
charge on supplies received from unregistered persons) have been kept in
abeyance till 30.09.2019 vide N/No. 22/2018 CT(R)]
(5) The Government may, on the recommendations of the Council, by notification,

specify categories of services the tax on intra-State supplies of which shall be paid
by the electronic commerce operator if such services are supplied through it, and
all the provisions of this Act shall apply to such electronic commerce operator as if
he is the supplier liable for paying the tax in relation to the supply of such services:
Provided that where an electronic commerce operator does not have a physical
presence in the taxable territory, any person representing such electronic
commerce operator for any purpose in the taxable territory shall be liable to pay
tax:
Provided further that where an electronic commerce operator does not have a
physical presence in the taxable territory and also, he does not have a
representative in the said territory, such electronic commerce operator shall
appoint a person in the taxable territory for the purpose of paying tax and such
person shall be liable to pay tax.
Addition of Service in RCM
15 Services supplied Individual NIL A banking 100%

by individual Direct company or a non-
Direct Selling Selling banking financial
Agents (DSAs) Agents company, located
other than a body (DSAs) in the taxable
corporate, other than a territory
partnership or body
limited liability corporate,
partnership firm to partnership
bank or non- or limited
banking financial liability
company partnership
(NBFCs). firm
Exemptions:
3. Pure services provided to Government:
Pure services provided to the Central Government, State Government or Union

territory or local authority or a Governmental authority or a Government Entity by
way of any activity:
• in relation to any function entrusted to a Panchayat under article 243G of the
Constitution or
• in relation to any function entrusted to a Municipality under article 243W of
the Constitution
5. Services by a Central Government, State Government, Union territory, local

authority or Governmental Authority by way of any activity in relation to any
function entrusted to a Panchayat under article 243G of the Constitution.
9D Services by an old age home run by Central Government, State Government or

by an entity registered under section 12AA of the Income-tax Act, 1961 to its
residents (aged 60 years or more) against consideration up to Rs 25,000/- pm
per member, provided that the consideration charged is inclusive of charges for
boarding, lodging and maintenance.
10A. Services supplied by electricity distribution utilities by way of construction,

erection, commissioning, or installation of infrastructure for extending electricity
distribution network up to the tube well of the farmer or agriculturalist for
agricultural use
14. Services by a hotel, inn, guest house, club or campsite, by whatever name
called, for residential or lodging purposes, having value of supply of a unit of
accommodation < Rs. 1,000/- per day or equivalent.
19A. Services by way of transportation of goods by an aircraft from customs station of

clearance in India to a place outside India [This exemption is available up to
30th Sept 2019]
19B. Services by way of transportation of goods by a vessel from customs station of

clearance in India to a place outside India. [This exemption is available up to
30th Sept 2019]
24A. Services by way of warehousing of minor forest produce
31A. Services by Coal Mines Provident Fund Organisation to persons governed by

the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948
31B. Services by National Pension System (NPS) Trust to its members against
consideration in the form of administrative fee
34A. Services supplied by Central Government, State Government, Union territory to

their undertakings or Public Sector Undertakings (PSUs) by way of guaranteeing
the loans taken by such undertakings or PSUs from the financial institutions
36A. Services by way of reinsurance of the insurance schemes specified in serial

number 35 or 36 or 40
41. Upfront amount (called as premium, salami, cost, price, development charges or
by any other name) payable in respect of service by way of granting of long term
lease of 30 years or more
— of industrial plots or plots for development of infrastructure for financial

business,
— provided by the State Government Industrial Development Corporations or
Undertakings or by any other entity having 50% or more ownership of Central
Government, State Government, Union territory
— to the industrial units or the developers in any industrial or financial business
area.
Explanation.- For the purpose of this exemption, the Central Government, State
Government or Union territory shall have 50% or more ownership in the entity
directly or through an entity which is wholly owned by the Central Government,
State Government or Union territory.
47A. Services by way of licensing, registration and analysis or testing of food samples
supplied by the Food Safety and Standards Authority of India (FSSAI) to Food
Business Operators
55A. Services by way of artificial insemination of livestock (other than horses)
65B. Services supplied by a State Government to Excess Royalty Collection

Contractor (ERCC) by way of assigning the right to collect royalty on behalf of
the State Government on the mineral dispatched by the mining lease holders.
Explanation.- “mining lease holder” means a person who has been granted
mining lease, quarry lease or license or other mineral concession under the
Mines and Minerals (Development and Regulation) Act, 1957, the rules made
thereunder or the rules made by a State Government under sub-section (1) of
section 15 of the Mines and Minerals (Development and Regulation) Act, 1957
Provided that at the end of the contract period, ERCC shall submit an account to
the State Government and certify that the amount of goods and services tax
deposited by mining lease holders on royalty is more than the goods and services
tax exempted on the service provided by State Government to the ERCC of
assignment of right to collect royalty and where such amount of goods and
services tax paid by mining lease holders is less than the amount of goods and
services tax exempted, the exemption shall be restricted to such amount as is
equal to the amount of goods and services tax paid by the mining lease holders
and the ERCC shall pay the difference between goods and services tax
exempted on the service provided by State Government to the ERCC of
assignment of right to collect royalty and goods and services tax paid by the
mining lease holders on royalty.
66. Services provided,
(a) By an educational institution to its students, faculty and staff;
(aa) by an educational institution by way of conduct of entrance examination against

consideration in the form of entrance fee;
(b) To an educational institution, by way of,

i. Transportation of students, faculty and staff;
ii. Catering, including any mid-day meals scheme sponsored by the
Government;
iii. Security or cleaning or house-keeping services performed in such

educational institution;
iv. Services relating to admission to, or conduct of examination by, such
institution;
v. supply of online educational journals or periodicals
Provided that nothing contained in sub-items (i), (ii) and (iii) of item (b) shall apply to
an educational institution other than an institution providing services by way of pre-
school education and education up to HSC or equivalent.
Provided further that nothing contained in sub-item (v) of item (b) shall apply to an
institution providing services by way of,-
(i) pre-school education and education up to higher secondary school or equivalent;
or
(ii) education as a part of an approved vocational education course.
❖ Educational institution: means an institution providing services by way of,-

i. pre-school education and education up to higher secondary school or
equivalent;
ii. education as a part of a curriculum for obtaining a qualification recognized
by any law for the time being in force;
iii. education as a part of an approved vocational education course.
iv. For removal of doubts, it is clarified that the Central and State Educational
Boards shall be treated as Educational Institution for the limited purpose of
providing services by way of conduct of examination to the students
❖ Approved vocational education course: means,-
a) a course run by an industrial training institute or an industrial training centre
affiliated to the National Council for Vocational Training or State Council for
Vocational Training offering courses in designated trades notified under the
Apprentices Act, 1961or
b) A Modular Employable Skill Course, approved by the National Council of
Vocational Training, run by a person registered with the Directorate
General of Training, Ministry of Skill Development and Entrepreneurship;
77A. Services provided by an unincorporated body or a non-profit entity registered

under any law for the time being in force, engaged in,-
(i) activities relating to the welfare of industrial or agricultural labour or farmers; or
(ii) promotion of trade, commerce, industry, agriculture, art, science, literature,

culture, sports, education, social welfare, charitable activities and protection
of environment,
to its own members against consideration in the form of membership fee up to an
amount of Rs 1000/- per member per year
Other Exemptions
4. Inter-State supply of services having place of supply in Nepal or Bhutan, against

payment in Indian Rupees have been exempted vide Notification No. 42/2017 IT
(R) dated 27.10.2017.
5 Services received from a provider of service located in a non- taxable territory by

way of supply of online educational journals or periodicals to an educational
institution other than an institution providing services by way of-
(i) pre-school education and education up to higher secondary school or

equivalent; or
(ii) education as a part of an approved vocational education course; have been
exempted vide Notification No. 2/2018 IT dated 25.01.2018.
6. Royalty and license fee exempted from IGST to the extent it is paid on the
consideration attributable to royalty and license fee included in transaction value
under Rule 10(1)(c) of Customs Valuation (Determination of value of imported
Goods) Rules, 2007
IGST leviable on import of services in relation to temporary transfer or permitting

the use or enjoyment of any intellectual property right has been exempted to the
extent of the aggregate of the duties of customs leviable under section 3(7) of the
Customs Tariff Act, 1975, on the consideration declared under section 14(1) of the
Customs Act, 1962 towards royalties and license fees included in the transaction
value as specified under rule 10 (1)(c) of the Customs Valuation (Determination of
Value of Imported Goods) Rules, 2007 on which the appropriate duties of customs
have been paid. [Notification No. 6/2018 IT (R) dated 25.01.2018]
Input Tax Credit
Central Goods and Service Tax (CGST) Rules, 2017
Rule 36 - Documentary requirements and conditions for claiming input tax credit.
(1) The input tax credit shall be availed by a registered person, including the Input Service
Distributor, on the basis of any of the following documents, namely,-
(a) an invoice issued by the supplier of goods or services or both in accordance with the
provisions of section 31;
(b) an invoice issued in accordance with the provisions of clause (f) of sub-section (3) of
section 31, subject to the payment of tax;
(c) a debit note issued by a supplier in accordance with the provisions of section 34;
(d) a bill of entry or any similar document prescribed under the Customs Act, 1962 or
rules made thereunder for the assessment of integrated tax on imports;
(e) an Input Service Distributor invoice or Input Service Distributor credit note or any
document issued by an Input Service Distributor in accordance with the provisions of
sub-rule (1) of rule 54.
(2) Input tax credit shall be availed by a registered person only if all the applicable particulars
as specified in the provisions of Chapter VI are contained in the said document, and the
relevant information, as contained in the said document, is furnished in FORMGSTR-2
by such person.
Provided that if the said document does not contain all the specified particulars but
contains the details of the amount of tax charged, description of goods or services, total
value of supply of goods or services or both, GSTIN of the supplier and recipient and
place of supply in case of inter-State supply, input tax credit may be availed by such
registered person.
(3) No input tax credit shall be availed by a registered person in respect of any tax that has
been paid in pursuance of any order where any demand has been confirmed on account of
any fraud, willful misstatement or suppression of facts.
Rule 37 - Reversal of input tax credit in the case of non-payment of consideration.

(1) A registered person, who has availed of input tax credit on any inward supply of goods or
services or both, but fails to pay to the supplier thereof, the value of such supply along
with the tax payable thereon, within the time limit specified in the second proviso to sub-
section (2) of section 16, shall furnish the details of such supply, the amount of value not
paid and the amount of input tax credit availed of proportionate to such amount not
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paid to the supplier in FORM GSTR-2 for the month immediately following the period of
180 days from the date of the issue of the invoice:
Provided that the value of supplies made without consideration as specified in Schedule I
of the said Act shall be deemed to have been paid for the purposes of the second proviso
to sub-section (2) of section 16.
Provided further that the value of supplies on account of any amount added in accordance
with the provisions of section 15(2)(b) (ie amount paid by recipient on behalf of supplier)
shall be deemed to have been paid for the purposes of the second proviso to section 16(2).
(2) The amount of input tax credit referred to in sub-rule (1) shall be added to the output
tax liability of the registered person for the month in which the details are furnished.
(3) The registered person shall be liable to pay interest at the rate notified under sub section
(1) of section 50 for the period starting from the date of availing credit on such supplies
till the date when the amount added to the output tax liability, as mentioned in sub-rule
(2), is paid.
(4) The time limit specified in sub-section (4) of section 16 shall not apply to a claim for re-
availing of any credit, in accordance with the provisions of the Act or the provisions of
this Chapter, that had been reversed earlier.
Cancellation of registration [Section 29]
Circumstances where registration is liable to be cancelled [Section

29(1) & (2)]
A. Circumstances when the registration can be cancelled either suo motu by

proper officer or on an application of the registered person or his legal heirs
(in case death of such person)
• Business discontinued
• Transferred fully for any reason including death of the proprietor –
• Amalgamated with other legal entity
• Demerged or
• Otherwise disposed of
• Change in the constitution of the business
• Taxable person (other than voluntarily registered person) who is no longer liable
to be registered under section 22 or section 24.
B. Circumstances when the proper officer can cancel registration on his own
In the following cases, registration can be cancelled by the proper officer from such
date, including any retrospective date, as he may deem fit:
(a) Following contraventions done by the registered person:
(i) He does not conduct any business from the declared place of business, or
(ii) He issues invoice/bill without supply of goods/services in violation of the
provisions of this Act, or the rules made thereunder.
(iii) If he violates the provisions of section 171 of the CGST Act.
(b) a person paying tax under section 10 has not furnished returns for three
consecutive tax periods.
(c) any registered person, other than a person paying tax under composition levy has
not furnished returns for a continuous period of six months.
(d) any person who has taken voluntary registration under sub-section (3) of section
25 has not commenced business within six months from the date of registration
(e) registration has been obtained by means of fraud, wilful misstatement or
suppression of facts
Procedure for cancellation of registration
• A registered person seeking cancellation of registration shall electronically submit

the application for cancellation of registration in prescribed form within 30 days of
occurrence of the event warranting cancellation.
• He is required to furnish in the application the details of inputs held in stock or

inputs contained in semi-finished/finished goods held in stock and of capital goods
held in stock on the date from which cancellation of registration is sought, liability
thereon, details of the payment, if any, made against such liability and may furnish
relevant documents thereof.
• Where a person who has submitted an application for cancellation of his

registration is no longer liable to be registered, proper officer shall issue the order
of cancellation of registration within 30 days from the date of submission of
application for cancellation.
• Where the proper officer cancels the registration suo-motu, he shall not cancel the
same without giving a show cause notice and without giving a reasonable
opportunity of being heard, to the registered person. The reply to such show cause
notice (SCN) has to be submitted within 7 days of service of notice.
• Provided that where the person instead of replying to the SCN for contravention of
the provisions contained in clause (b) or clause (c) of sub-section (2) of section 29,
furnishes all the pending returns and makes full payment of the tax dues along with
applicable interest and late fee, the proper officer shall drop the proceedings and
pass an order.
• If reply to SCN is satisfactory, proper officer shall drop the proceedings and pass
an order in prescribed form. Where registration of a person is liable to be cancelled,
proper officer shall issue the order of cancellation of registration within 30 days
from the date of reply to SCN.
• The cancellation of registration shall be effective from a date to be determined by

the proper officer. He will direct the taxable person to pay arrears of any tax,
interest or penalty including the amount liable to be paid under section 29(5)
Reversal of credit [Section 29(5) & (6)]
A registered person whose registration is cancelled will have to debit the electronic
credit or cash ledger by an amount equal to
(i) input tax credit (ITC) in respect of:
➢ stock of inputs and inputs contained in semi-finished/finished goods’ stock or
➢ capital goods or plant and machinery
on the day immediately preceding the date of cancellation, or
(ii) the output tax payable on such goods
whichever is higher, calculated in such manner as may be prescribed.
Revocation of cancellation of registration [Section 30 read with rule

23]
➢ Where the registration of a person is cancelled suo-motu by the proper officer, such
registered person may apply for revocation of the cancellation to such proper
officer, within 30 days from the date of service of the order of cancellation of
registration, at the GST Common Portal in the prescribed manner.
➢ However, in case registration was cancelled for failure of registered person to

furnish returns, before applying for revocation the person has to make good the
defaults (by filing all pending returns, making payment of all dues in terms of such
returns along with interest, penalty, late fee, etc.) for which the registration was
cancelled by the officer.
➢ If the proper officer is satisfied that there are sufficient grounds for revocation of
cancellation, he may revoke the cancellation of registration, by an order within 30
days of receipt of application and communicate the same to applicant.
➢ Otherwise, he may reject the revocation application. However, before rejecting the
application, he has to first issue SCN to the applicant who shall furnish the
clarification within 7 working days of service of SCN. The proper officer shall
dispose the application (accept/reject the same) within 30 days of receipt of
clarification.
➢ The revocation of cancellation of registration under the SGST Act/ UTGST Act, as
the case may be, shall be deemed to be a revocation of cancellation of registration
under CGST Act
List of various Forms
SL No Form No Title of the Form
1 GST-REG- Application for registration

01
2 GST-REG- Acknowledgement
02
3 GST-REG- Notice Seeking Additional information/ clarification/

03 documents relating to application for registration /
amendment / cancellation
4 GST-REG- Furnishing clarification sought in GST REG-03

04
5 GST-REG- Order of rejection of Application

05
6 GST-REG- Registration Certificate issued

06
7 GST-REG- Application for Regn of Tax Deductor / Tax Collected at

07 source
8 GST-REG- Order of cancellation of registration as Tax deductor or Tax

08 collector at source
9 GST-REG- Application for Registration for Non-Resident Taxable

09 person
10 GST- REG- Application for registration for OIDRS by Non-Resident

9A Taxable person
11 GST-REG- Application for extension in period of causal taxable person

10 or nonresident taxable person
12 GST-REG- Temporary Suo Moto Registration

11
13 GST-REG- Application to grant UID

12
Goods transported in SKD/CKD condition or in batches or lots

Where the goods are being transported in a semi knocked down or completely
knocked down condition or in batches or lots,
(a) the supplier shall issue the complete invoice before dispatch of the first
consignment;
(b) the supplier shall issue a delivery challan for each of the subsequent
consignments, giving reference of the invoice;
(c) Copies of the corresponding delivery challan shall accompany each
consignment along with a duly certified copy of the invoice; and
(d) the original copy of the invoice shall be sent along with the last consignment.
Rule 58. Records to be maintained by owner or operator of godown

or warehouse and transporters. -
(1) Every person required to maintain records and accounts in accordance with the
provisions of sub-section (2) of section 35, if not already registered under the
Act, shall submit the details regarding his business electronically on the common
portal in FORM GST ENR-01, either directly or through a Facilitation Centre
notified by the Commissioner and, upon validation of the details furnished, a
unique enrolment number shall be generated and communicated to the said
person.
(1A) For the purposes of Chapter XVI of these rules, a transporter who is registered
in more than one State or Union Territory having the same Permanent Account
Number, he may apply for a unique common enrolment number by submitting
the details in FORM GST ENR-02 using any one of his Goods and Services Tax
Identification Numbers, and upon validation of the details furnished, a unique
common enrolment number shall be generated and communicated to the said
transporter:
Provided that where the said transporter has obtained a unique common
enrolment number, he shall not be eligible to use any of the Goods and Services
Tax Identification Numbers for the purposes of the said Chapter XVI.
(2) The person enrolled under sub-rule (1) as aforesaid in any other State or Union
territory shall be deemed to be enrolled in the State or Union territory.
(3) Every person who is enrolled under sub-rule (1) shall, where required, amend
the details furnished in FORM GST ENR-01 electronically on the common portal
either directly or through a Facilitation Centre notified by the Commissioner.
(4) Subject to the provisions of rule 56, -

(a) any person engaged in the business of transporting goods shall maintain
records of goods transported, delivered and goods stored in transit by him
along with the Goods and Services Tax Identification Number of the
registered consigner and consignee for each of his branches.
(b) every owner or operator of a warehouse or godown shall maintain books of
accounts with respect to the period for which particular goods remain in the
warehouse, including the particulars relating to dispatch, movement, receipt
and disposal of such goods.
(5) The owner or the operator of the godown shall store the goods in such manner
that they can be identified item-wise and owner-wise and shall facilitate any
physical verification or inspection by the proper officer on demand.
Chapter 14: Returns

Furnishing details of outward supplies: Section 37 [CGST] r/w Rule
59:
1. Who is required to furnish return under this section?
A return of Outward supplies under this Section should be furnished by every
registered taxable person except for the following persons namely
• Input service distributor
• A non-resident taxable person
• A person paying tax under the provisions of section 10 (composition levy)
• A person paying tax under the provisions of section 51 (TDS)
• A person paying tax under the provisions of section 52 (TCS)
2. What are the details needed to be included in the Details of outward

supplies?
The details of outward supplies of goods or services or both furnished in FORM
GSTR-1 shall include the–
(a) invoice wise details of all –
(i) inter-State and intra-State supplies made to the registered persons; and
(ii) inter-State supplies with invoice value more than 2.5 lakh rupees made to
the unregistered persons;
(b) consolidated details of all –
(i) intra-State supplies made to unregistered persons for each rate of tax; and
(ii) State wise inter-State supplies with invoice value up to 2.5 lakh rupees
made to unregistered persons for each rate of tax;
(c) debit and credit notes, if any, issued during the month for invoices issued
previously.
3. What is the time limit and manner of furnishing return under section 37?
• This e-return shall be filed within 10 days from the end of the tax period in
FORM GSTR-1
• Such return shall be for supply of goods or services or both as effected during
a tax period and shall be filed electronically.
• The registered person shall not be allowed to furnish any details of outward
supplies during the period from the 11th day to the 15th day of the month
succeeding the tax period. This implies that the filing portal may not be available
for the person filing the return of outward supplies during the above said dates.
Notification No. 43/2018 – Central Tax 10th September, 2018

the Central Government, on the recommendations of the Council, hereby
notifies the registered persons having aggregate turnover of up to 1.5 crore
rupees in the preceding financial year or the current financial year, shall follow
the special procedure as mentioned below for furnishing the details of outward
supply of goods or services or both.
2. The said persons may furnish GSTR-1 till the time as specified below,
namely: -
Sl. Quarter for which details in FORM Time period for furnishing
No. GSTR-1 are furnished details in FORM GSTR-1
1 April – June, 2018 31st October, 2018
2 July - September, 2018 31st October, 2018
[15th Nov for Kerala,
Kodagu district in Karnataka
and Mahe in Puducherry]
3 October - December, 2018 31st January, 2019
4 January - March, 2019 30th April, 2019
Notification No. 44/2018 – Central Tax 10th September, 2018

the Commissioner, on the recommendations of the Council, xtends the time
limit for furnishing the details of outward supplies in FORM GSTR-1 by
registered persons having aggregate turnover of more than 1.5 crore rupees
in the preceding financial year or the current financial year, for the months from
(i) July, 2017 to September, 2018 till the 31st day of October, 2018 and
(ii) October, 2018 to March, 2019 till the 11th day of the succeeding month
4. What are the consequences of late filling of details?

In case of late filing of the above details, the person who defaults shall pay a sum
of Rs. 100 for every day of continuing default subject to a maximum to Rs. 5000
only. (concession allowed. See section 47)
5. Can the due date for furnishing return be extended?

The Commissioner is empowered to notify any extension of due date of filing, for
any class of persons, beyond the 10th of the succeeding month, with reasons to
be recorded in writing.
6. What are the Role of recipient of the supply in furnishing return of supplies
by the provider?
The recipient of the supply shall be Provided an opportunity to accept, reject,
amend or delete the details in a two-way communication process. The details
Provided by the supplier shall be auto – populated and available electronically to
the recipient, for matching purposes, in a FORM GSTR- 2A
7. Rectification of return.
In case any error or omission is discovered in the course of matching as specified
in the Act and discussed under Section 42 and 43, rectifications of the same shall
be affected. Tax and interest, if any as applicable shall be paid on such corrections
by the person responsible for filing the return of outward supplies
Such rectification, however, is not permitted after filing of annual return or the
return for the month of September of the following financial year whichever is
earlier.
For example, let us say an entity has furnished the annual returns for the year
2018-19 on August 15, 2019. An error is discovered in respect of a transaction
pertaining to July 2018. The entity has filed the returns for the month of
September 2019 on October 18, 2019. In this above case, the rectification of the
error pertaining to a transaction in July 2018 cannot be rectified beyond August
15, 2019
Central Goods and services tax rules, 2017
Rule 61. Form and manner of submission of monthly return. -
(1) Every registered person other than a person referred to in section 14 of the
Integrated Goods and Services Tax Act, 2017 or an Input Service Distributor or a
non-resident taxable person or a person paying tax under section 10 or section 51
or, as the case may be, under section 52 shall furnish a return specified under sub-
section (1) of section 39 in FORM GSTR-3 electronically through the common
portal either directly or through a Facilitation Centre notified by the Commissioner.
(2) Part A of the return under sub-rule (1) shall be electronically generated on the basis
of information furnished through FORM GSTR-1, FORM GSTR-2 and based on
other liabilities of preceding tax periods.
(3) Every registered person furnishing the return under sub-rule (1) shall, subject to
the provisions of section 49, discharge his liability towards tax, interest, penalty,
fees or any other amount payable under the Act or the provisions of this Chapter
by debiting the electronic cash ledger or electronic credit ledger and include the
details in Part B of the return in FORM GSTR-3.
(4) A registered person, claiming refund of any balance in the electronic cash ledger
in accordance with the provisions of sub-section (6) of section 49, may claim such
refund in Part B of the return in FORM GSTR-3 and such return shall be deemed
to be an application filed under section 54.
(5) Where the time limit for furnishing of details in FORM GSTR-1 under section 37
and in FORM GSTR-2 under section 38 has been extended and the circumstances
so warrant, the Commissioner may, by notification, specify the manner and
conditions subject to which the return shall be furnished in FORM GSTR-3B
electronically through the common portal, either directly or through a Facilitation
Centre notified by the Commissioner.
Notification No. 34/2018 – Central Tax 10th August, 2018

1. The return in FORM GSTR-3B, for each of the months from July, 2018 to March,
2019 shall be furnished electronically through the common portal, on or before the
20th day of the month succeeding such month. (for July 2018 the due date will be
24th Aug 2018)
2. Payment of taxes for discharge of tax liability as per FORM GSTR-3B.– Every
registered person furnishing the return in FORM GSTR-3B of the said rules shall,
subject to the provisions of section 49 of the said Act, discharge his liability towards
tax, interest, penalty, fees or any other amount payable under the said Act by
debiting the electronic cash ledger or electronic credit ledger, as the case may be,
not later than the due date, as specified in the first paragraph, to furnish the said
return.
The return in FORM GSTR-3B for the months of July, 2018 and August, 2018,
for–
(i) registered persons in the State of Kerala;
(ii) registered persons whose principal place of business is in Kodagu district in
the State of Karnataka; and
(iii) registered persons whose principal place of business is in Mahe in the Union
territory of Puducherry
shall be furnished electronically through the common portal, on or before the 5th
October, 2018 and 10th October, 2018 respectively
(6) Where a return in FORM GSTR-3B has been furnished, after the due date for
furnishing of details in FORM GSTR-2—
(a) Part A of the return in FORM GSTR-3 shall be electronically generated on the
basis of information furnished through FORM GSTR-1, FORM GSTR-2 and
based on other liabilities of preceding tax periods and PART B of the said return
shall be electronically generated on the basis of the return in FORM GSTR-3B
furnished in respect of the tax period;
(b) the registered person shall modify Part B of the return in FORM GSTR-3 based
on the discrepancies, if any, between the return in FORM GSTR-3B and the
return in FORM GSTR-3 and discharge his tax and other liabilities, if any;
(c) where the amount of input tax credit in FORM GSTR-3 exceeds the amount of
input tax credit in terms of FORM GSTR-3B, the additional amount shall be
credited to the electronic credit ledger of the registered person.
Rule 83. Provisions relating to a goods and services tax practitioner.

-
(1) An application in FORM GST PCT-01 may be made electronically through the
common portal either directly or through a Facilitation Centre notified by the
Commissioner for enrolment as goods and services tax practitioner by any person
who,
i. is a citizen of India;
ii. is a person of sound mind;
iii. is not adjudicated as insolvent;
iv. has not been convicted by a competent court; and satisfies any of the
following conditions, namely: -
(a) that he is a retired officer of the Commercial Tax Department of any State
Government or of the Central Board of Excise and Customs, Department
of Revenue, Government of India, who, during his service under the
Government, had worked in a post not lower than the rank of a Group-B
gazetted officer for a period of not less than two years; or
(b) that he has enrolled as a sales tax practitioner or tax return preparer
under the existing law for a period of not less than five years;
(c) he has passed,
(i) a graduate or postgraduate degree or its equivalent examination
having a degree in Commerce, Law, Banking including Higher
Auditing, or Business Administration or Business Management from
any Indian University established by any law for the time being in
force; or
(ii) a degree examination of any Foreign University recognised by any

Indian University as equivalent to the degree examination mentioned
in sub-clause (i); or
(iii) any other examination notified by the Government, on the

recommendation of the Council, for this purpose; or
(iv) has passed any of the following examinations, namely: -

(a) final examination of the Institute of Chartered Accountants of
India; or
(b) final examination of the Institute of Cost Accountants of India; or
(c) final examination of the Institute of Company Secretaries of India.
(2) On receipt of the application referred to in sub-rule (1), the officer authorised in this
behalf shall, after making such enquiry as he considers necessary, either enrol the
applicant as a goods and services tax practitioner and issue a certificate to that
effect in FORM GST PCT-02 or reject his application where it is found that the
applicant is not qualified to be enrolled as a goods and services tax practitioner.
(3) The enrolment made under sub-rule (2) shall be valid until it is cancelled: Provided
that no person enrolled as a goods and services tax practitioner shall be eligible to
remain enrolled unless he passes such examination conducted at such periods
and by such authority as may be notified by the Commissioner on the
recommendations of the Council:
Provided further that no person to whom the provisions of clause (b) of sub-rule (1)
apply shall be eligible to remain enrolled unless he passes the said examination
within a period of 18 months from the appointed date.
(4) If any goods and services tax practitioner is found guilty of misconduct in
connection with any proceedings under the Act, the authorised officer may, after
giving him a notice to show cause in FORM GST PCT-03 for such misconduct and
after giving him a reasonable opportunity of being heard, by order in FORM GST
PCT -04 direct that he shall henceforth be disqualified under section 48 to function
as a goods and services tax practitioner.
(5) Any person against whom an order under sub-rule (4) is made may, within thirty
days from the date of issue of such order, appeal to the Commissioner against
such order.
(6) Any registered person may, at his option, authorise a goods and services tax
practitioner on the common portal in FORM GST PCT-05 or, at any time, withdraw
such authorisation in FORM GST PCT-05 and the goods and services tax
practitioner so authorised shall be allowed to undertake such tasks as indicated in
the said authorization during the period of authorisation.
(7) Where a statement required to be furnished by a registered person has been

furnished by the goods and services tax practitioner authorised by him, a
confirmation shall be sought from the registered person over email or SMS and
the statement furnished by the goods and services tax practitioner shall be made
available to the registered person on the common portal:
Provided that where the registered person fails to respond to the request for
confirmation till the last date of furnishing of such statement, it shall be deemed
that he has confirmed the statement furnished by the goods and services tax
practitioner.
(8) A goods and services tax practitioner can undertake any or all of the following
activities on behalf of a registered person, if so authorised by him to-
(a) furnish the details of outward and inward supplies;
(b) furnish monthly, quarterly, annual or final return;

(c) make deposit for credit into the electronic cash ledger;
(d) file a claim for refund; and
(e) file an application for amendment or cancellation of registration:
Provided that where any application relating to a claim for refund or an application
for amendment or cancellation of registration has been submitted by the goods and
services tax practitioner authorised by the registered person, a confirmation shall
be sought from the registered person and the application submitted by the said
practitioner shall be made available to the registered person on the common portal
and such application shall not be proceeded with further until the registered person
gives his consent to the same.
(9) Any registered person opting to furnish his return through a goods and services tax
practitioner shall-
(a) give his consent in FORM GST PCT-05 to any goods and services tax
practitioner to prepare and furnish his return; and
(b) before confirming submission of any statement prepared by the goods and
services tax practitioner, ensure that the facts mentioned in the return are true
and correct.
(10) The goods and services tax practitioner shall-

(a) prepare the statements with due diligence; and
(b) affix his digital signature on the statements prepared by him or electronically
verify using his credentials.
(11) A goods and services tax practitioner enrolled in any other State or Union territory
shall be treated as enrolled in the State or Union territory for the purposes
specified in sub-rule (8).
Section 51: Tax Deducted at Source [made effective from 1-10-2018

vide N/N 50/2018]
1. Introduction: The concept of Tax Deduction at Source (TDS) was there in the
erstwhile VAT Laws. GST Law also mandates Tax Deduction at Source (TDS) vide
Section 51 of the CGST/SGST Act 2017, Section 20 of the IGST Act, 2017 and
Section 21 of the UTGST Act, 2017. GST Council in its 28th meeting held on
21.07.2018 recommended the introduction of TDS from 01.10.2018.
2. Following would be the deductors of tax in GST under section 51 of the CGST Act,
2017 read with notification No. 33/2017-Central Tax dated 15.09.2017:
(a) a department or establishment of the Central Government or State Government
[Section 51(1)(a)]; or
(b) local authority [Section 51(1)(b)]; or
(c) Governmental agencies [Section 51(1)(c)]; or
(d) Notified Persons/category of persons [Section 51(1)(d)
Following persons notified by the Central Government
(i) an authority or a board or any other body, -
(1) set up by an Act of Parliament or a State Legislature; or
(2) established by any Government, with 51% or more participation by way
of equity or control, to carry out any function; or
(ii) a society established by the Central Government or the State Government
or a Local Authority under the Societies Registration Act, 1860; or
(iii) public sector undertakings.
3. When tax deduction is required to be made in GST?

Tax is required to be deducted from the payment made / credited to a supplier, if the
total value of supply under a contract in respect of supply of taxable goods or services
or both, exceeds Rs. 2,50,000/- (Rupees two lakh and fifty thousand).
This value shall exclude the taxes leviable under GST (i.e. ‘Central tax’, ‘State tax’,
‘UT tax’, ‘Integrated tax’ & Cess)
3.1 Conditions for & amount of deduction:

Tax deduction is required if all the following conditions are satisfied –
a) Total value of taxable supply > Rs.2.5 Lakh under a single contract. This
value shall exclude taxes & cess leviable under GST.
b) If the contract is made for both taxable supply and exempted supply, deduction
will be made if the total value of taxable supply in the contract > Rs.2.5 Lakh.
This value shall exclude taxes & cess leviable under GST.
c) Where the location of the supplier and the place of supply are in the same
State/UT, it is an intra-State supply and TDS @ 1% each under CGST Act and
SGST/UTGST Act is to be deducted if the deductor is registered in that State

or Union territory without legislature.
d) Where the location of the supplier is in State A and the place of supply is in
State or Union territory without legislature - B, it is an inter-State supply and
TDS @ 2% under IGST Act is to be deducted if the deductor is registered in
State or Union territory without legislature - B.
e) Where the location of the supplier is in State A and the place of supply is in
State or Union territory without legislature B, it is an inter-State supply and TDS
@ 2% under IGST Act is to be deducted if the deductor is registered in State A.
f) When advance is paid to a supplier on or after 01.10.2018 to a supplier for
supply of taxable goods or services or both.
4. When tax deduction is not required to be made under GST: Tax deduction is not
required in following situations:
a) Total value of taxable supply ≤ Rs. 2.5 Lakh under a contract.
b) Contract value > Rs. 2.5 Lakh for both taxable supply and exempted supply,
but the value of taxable supply under the said contract ≤ Rs. 2.5 Lakh.
c) Receipt of services which are exempted. For example, services exempted
under notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 as
amended from time to time.
d) Receipt of goods which are exempted. For example, goods exempted under
notification No. 2/2017 – Central Tax (Rate) dated 28.06.2017 as amended
from time to time.
e) Goods on which GST is not leviable. For example, petrol, diesel, petroleum
crude, natural gas, aviation turbine fuel (ATF) and alcohol for human
consumption.
f) Where a supplier had issued an invoice for any sale of goods in respect of which
tax was required to be deducted at source under the VAT Law before
01.07.2017, but where payment for such sale is made on or after 01.07.2017
[Section 142(13) refers].
g) Where the location of the supplier and place of supply is in a State(s)/UT(s)
which is different from the State / UT where the deductor is registered.
h) All activities or transactions specified in Schedule III of the CGST/SGST Acts
2017, irrespective of the value.
i) Where the payment relates to a tax invoice that has been issued before
01.10.2018.
j) Where any amount was paid in advance prior to 01.10.2018 and the tax invoice
has been issued on or after 01.10.18, to the extent of advance payment made
before 01.10.2018.
k) Where the tax is to be paid on reverse charge by the recipient i.e. the deductee.
l) Where the payment is made to an unregistered supplier.
m) Where the payment relates to “Cess” component
5. Illustrations of various situations requiring deduction of tax:

Situations / Contracts Deduction Remarks
required YES
/ NO
Finance Department is Yes Where the total contract value of
making a payment of Rs.3 taxable supply is more than
Lakh to a supplier of ‘printing Rs.2.5 Lakh deduction is
& stationery’. mandatory.
Education Department is Yes, deduction Books are exempted goods; no
making payment of Rs.5 Lakh is required in deduction is required in respect of
to a supplier of ‘printed books respect of supply of books. However,
and printed or illustrated post payment of Rs. payment involving ‘printed or
cards’ where payment for 3 Lakh only i.e. illustrated post cards’ is for supply
books is Rs.2 Lakh and Rs.3 for payment in of taxable goods and value of
Lakh is for other printed or respect of such supply is > Rs.2.5 Lakh; so
illustrated post cards. taxable supply. deduction is required.
Finance Department, is See Remarks Deduction is mandatory in case
making payment of Rs.1.5 the total value of taxable supply
Lakh to a supplier of ‘car under the contract > Rs.2.5 Lakh
rental service’. irrespective of the amount paid.
However, if the total value of
supply under a contract is <
Rs.2.5 Lakh, deduction is not
required.
Health Department executed No Total value of supply as per the
a contract with a local supplier contract is Rs.2.6 Lakh (including
to supply “medical grade GST). Tax rate is 12%. So,
oxygen” of Rs.2.6 Lakh taxable value of supply (excluding
(including GST) and is making GST) stands at Rs.2.6L x 100/112
full payment. = Rs.2.32 L < Rs.2.5 Lakh Hence,
deduction is not required.
Municipal Corporation of Yes deduction is required @2%
Kolkata purchases a heavy Deduction is required in case of
generator from a supplier in inter-State supply and if the value
Delhi. Now, it is making of taxable supply under a contract
payment of Rs.5 Lakh and exceeds Rs.2.5 Lakh.
IGST @18% on Rs.5 Lakh for
such purchase.
Fisheries Department is No This supply of service is exempt in
making a payment of Rs.10 terms of Sl. No. 3 of notification
Lakh to a contractor for No.12/2017 – Central Tax (Rate)
supplying labour for digging a dated 28.06.2017 and hence
deduction is not required.
pond for the purpose of

Fisheries.
Municipality is making No This supply of service is exempt in
payment of Rs.5 Lakh to a terms of Sl. No. 3A of notification
supplier in respect of cleaning No.12/2017 – Central Tax (Rate)
of drains where the value of dated 28.06.2017 as amended by
supply of goods is not more notification no. 2/2018- Central
than 25% of the value of Tax (Rate) dated 25.01.2018 and
composite supply. hence deduction is not required.
Government school is making No This supply of service is exempt in
a payment of Rs.3 Lakh to a terms of Sl. No. 66 of notification
supplier for supply of cooked No. 12/2017 – Central Tax (Rate)
food as mid-day meal under a dated 28.06.2017 as amended
scheme sponsored by and hence deduction is not
Central/State Government. required.
Health Department is making No This supply of goods is exempt in
payment of Rs.10 Lakh to a terms of Sl. No.142 of notification
supplier for supply of Hearing No. 2/2017 – Central Tax (Rate)
Aids. dated 28.06.2017 as amended
and hence deduction is not
required.
Situation (in Location Place State of Type of Tax TDS

all cases of of registration Supply deduction
taxable Supplier Supply of recipient
contract
value is over
Rs.2.5 Lakh)
Govt. of WB Kolkata Kolkata West Intra CGST+ Yes
purchases Bengal State SGST
taxable
goods from a
local supplier
Govt. of Delhi Punjab Punjab Inter IGST Yes
Punjab State
purchases
taxable
goods from a
supplier in
Delhi
Govt. of WB Delhi Delhi West Intra CGST+ No

engages a Bengal State in SGST
contractor of the
Delhi for State of
renovation of Delhi
Bangla
Bhawan in
Delhi
Valuation of supply for deduction of TDS and applicable rates with

illustrations:
For the purpose of deduction of TDS, the value of supply shall exclude the taxes
leviable under GST (i.e. ‘Central tax’, ‘State tax’, ‘UT tax’, ‘Integrated tax’ & Cess).
Thus, no tax shall be deducted on ‘Central tax’, ‘State tax’, ‘UT tax’, ‘Integrated tax’
and cess component levied on supply. No deduction of tax and cess should also be
made on the value of exempted goods or services or both even if the exempt and
taxable supply are billed together.
NOTE: Suppose three separate contracts for supply are given to M/S ABC by the
Health Department of the Government of West Bengal and the value of taxable supply
is below Rs.2.5 Lakh in case of each contract though their combined value is more
than Rs.2.5 Lakh; in such case no deduction is required to be made since value of
taxable supply in neither of the contract exceeds Rs. 2.5 Lakh.
6.1 Rate of deduction of tax:

There are 4 types of taxes in GST – Integrated Tax (IGST), Central Tax (CGST) and
State Tax (SGST) / Union territory Tax (UTGST).
The deduction in case of intra-State supply (supply within a State) will be CGST &
SGST (in case of Union territory without legislature, it will be CGST & UTGST), and
the deduction in case of inter-State supply (supply from one State to another) will be
IGST.
Rate of such deduction is @ 2% [i.e. 1% each on CGST & SGST/UTGST component]
on the amount paid/credited in respect of intra-State supply & @ 2% [as IGST] on the
amount paid/credited in respect of inter-State supply.
6.2 Illustration of various situations requiring determination of value

of supply for deduction of tax: 6.2.1 Supplier is registered and
contract value is excluding GST:
Example 1: Supplier X makes taxable supply worth Rs. 10,000/- to a Municipality
where contract for supply is for Rs.15,00,000/-. The rate of GST is 18%. Supplier and
the deductor are in the same State. Following payment is being made by this
Municipality to X:
Rs. 10,000 (value of Supply) + Rs 900 (Central Tax) + Rs 900 (State Tax).
Value of supply = Rs.10,000/-
Tax to be deducted from payment:

Central Tax = 1% on Rs.10,000/- = Rs.100/-;
State Tax = 1% on Rs.10,000/- = Rs.100/-
Payment due to X after TDS as per GST provisions: Rs. 11600/-
Rs.10,000/- + Rs.900 + Rs.900 – Rs.100 – Rs.100 = Rs.11600/-
6.2.2 Supplier is registered and contract value is inclusive of GST:

Example 2: Supplier Y of Mumbai makes taxable supply worth Rs. 10,000/- &
exempted supply worth Rs. 20,000/- in an invoice/bill of supply to Finance Deptt. of
GoI located in New Delhi where contract for supply is for Rs.6,00,000/- (Rs.2,60,000
for taxable supply including GST and Rs.3,40,000 for exempted supply). The rate of
GST is 18%. Following payment is being made by GoI to Y: Rs.10,000/-(value of
taxable Supply) + Rs.1,800 (Integrated Tax) + Rs.20, 000/- (value of exempted
Supply).
Whether any deduction of tax is required?
Value of taxable supply in the contract= Rs.2,60, 000/- (including GST) Value of such
contract excluding tax= 260000x100/118= Rs.220340/-
Since, the value of taxable supply in the contract does not exceed Rs.2.5 Lakh,
deduction of tax is not required.
16 6.2.3 Supplier is registered under composition scheme:

Example 3: Supplier ZA is a person registered under the composition scheme in
Jharkhand who makes taxable supply worth Rs. 10,000/-to a Local Authority of
Jharkhand where value of taxable supply under the contract is for Rs.2, 55,000/-
Following payment is being made by the Local Authority of Jharkhand to ZA: Rs.10,
000/- Value of taxable supply under the contract is Rs.2, 55, 000/- which is more than
Rs.2.5 Lakh and hence deduction of tax is required
7. Registration of deductor of tax in GST:

• The existing deductors of STDS/TCS under VAT Act will not be automatically
migrated to GST.
• Section 24(vi) of the CGST Act, 2017 provides for compulsory liability for registration
for the deductors of TDS.
• A deductor in GST will be required to get registered and obtain a GSTIN [Goods &
Services Tax Identification Number] as a TDS deductor even if he is separately
registered as a supplier.
• A deductor has to get himself registered through the portal www.gst.gov.in by using
their PAN/TAN. The entire process is online.
8. Payment of TDS (provisions and procedure):

By nature, the method of depositing TDS under GST is very much similar with the
method followed for VAT efs payment in VAT. In GST, there will be a single portal
www.gst.gov.in for registration, payment and filing of Returns. This section to be State-
specific and to be written by the State concerned in accordance with the respective
Treasury Management System. The Centre has already issued necessary
instructions.
Challan generation for depositing the deducted tax: The deductor has to generate
a challan in the portal at www.gst.gov.in and deposit the tax so deducted through e-
payment mode [Net Banking/Debit-Credit card/NEFT-RTGS] or OTC Mode
[Cash/Cheque/DD].
9. TDS Return:
The filing the TDS Return in FORM GSTR-7 can be done both through the online mode
in the GST portal as well as by using the offline tool.
Every registered TDS deductor is required to file a Return in FORM GSTR 7
electronically within 10th of the month succeeding the month in which deductions have
been made to avoid payment of any late fee, interest. [Section 39(3) of the CGST Act,
2017 read with Rule 66 of the CGST Rules, 2017
10. Deposit of TDS with the Government

The amount of tax deducted at source should be deposited to the Government account by the
deductor by 10th of the succeeding month.
11. TDS Certificate

The deductor shall furnish to the deductee a system generated certificate in FORM
GSTR 7A mentioning therein the contract value, rate of deduction, amount deducted,
amount paid to the Government and other related particulars. The said certificate is to
be furnished within 5 days of crediting the amount so deducted to the Government i.e.
within 5 days of furnishing return in FORM GSTR7. The entire exercise has to be
completed through www.gst.gov.in. The deductee (i.e. the supplier) shall claim the
credit of such deduction in his electronic cash ledger.
Ex - The Municipal Corporation of Chennai deducts CGST at source @1% from the
payment to be made to a notified supplier on 4th July. This TDS amount has to be
remitted into the Treasury on or before 10th August. The TDS certificate with the
above-mentioned details has to be issued on before 15th of August.
12. Late fee, interest and penalty:

The provision of late Fees in respect of TDS in the GST is a two layered provision.
• If the deductor fails to furnish the return in FORM GSTR-7 (under Section 39(3))
by the due date (i.e. within 10 days of the month succeeding the month in which
deduction was made) he shall pay a late fee of Rs. 100/- per day under CGST Act &
SGST/UTGST Act separately during which such failure continues subject to a

maximum amount of Rs. 5000/- each under CGST Act & SGST/UTGST Act.
• If any deductor fails to furnish the certificate of TDS deduction to the deductee [i.e.
the supplier] within 5 days of crediting the amount so deducted to the Government (i.e.
furnishing return in FORM GSTR7), the deductor shall pay a late fee of Rs. 100/- per
day under CGST Act & SGST/UTGST Act separately from the day after the expiry of
5-day period until the failure is rectified, subject to a maximum amount of Rs.5000/-
each under CGST Act & SGST/UTGST Act.
13. Refund on excess/erroneous deduction

The deductor or the deductee can claim refund of excess deduction or erroneous
deduction. The provisions of section 54 relating to refunds would apply in such cases.
However, if the deducted amount is already credited to the electronic cash ledger of
the supplier, the same shall not be refunded.
Section 52 [CGST]: Tax Collected at Source [made effective from 1-

10-2018 vide N/N 51/2018]
TCS refers to the tax which is collected by the electronic commerce operator when a
supplier supplies some goods or services through its portal and the payment for that
supply is collected by the electronic commerce operator.
Who is liable to collect TCS?

Every Electronic Commerce Operator (ECO), not being an agent, has been mandated
to collect tax at source (TCS) from the net value of taxable supplies made through it
by other suppliers, whenever the ECO collects the consideration on behalf of the
supplier.
Rate of TCS
every electronic commerce operator, not being an agent, shall collect an amount
calculated @ 0.5% of the net value of intra-State taxable supplies made through it by
other suppliers where the consideration with respect to such supplies is to be collected
by the said operator.
Deposit of TCS by ECO to Government

The TCS amount collected by the ECO has to be remitted to the Government Treasury
within 10 days after the end of the month in which the collection was made. [Sub-
section (3)]
Ex- If the TCS has been collected in the month of July, the amount has to be remitted
into the Government Treasury on or before 10th August.
Filing of Monthly & Annual Statements by ECO

An electronic statement has to be filed by the ECO containing details of the outward
supplies of goods and/ or services effected through it, including the supplies returned
through it and the amount collected by it as TCS during the month within 10 days after
the end of each month in which supplies are made. [Sub-section (4)]
Additionally, the ECO is also mandated to file an Annual Statement on or before 31st
day of December following the end of the financial year. [Subsection (5)]
Rectification in Monthly Statement by ECO

If the ECO discovers any discrepancy on his own not being the result of any scrutiny,
inspection or enforcement proceedings, he has to rectify the statement. However, the
limit for rectification is earlier of the two: -
(i) due date for filing statement for the month of September following the end of
the financial year.
OR
(ii) Actual date of furnishing of relevant annual statement. Interest provisions are
applicable. [Sub-section (6)]
Claim of Credit by Supplier
Supplier can claim credit of the TCS amount in his electronic cash ledger. This amount
should reflect in the monthly statement filed by the e-commerce operator. [Sub-section
(7)]
Matching of details of supplies

The details of the supplies, including the value of supplies, submitted by every operator
in the statements will be matched with the details of supplies submitted by all such
suppliers in their returns. [Sub-section (8)]
If there is any discrepancy in the value of supplies, the same would be communicated
to both of them. If such discrepancy in value is not rectified within the given time, then
such amount would be added to the output tax liability of such supplier succeeding the
calendar month in which the discrepancy is communicated, where outward supplies
furnished by operator is more than the value as shown by supplier.
The supplier will have to pay the differential amount of output tax along with interest
from the date such tax was due till the date of its payment. [Subsections 9 To 11]
Notice to the Operator

• An officer not below the rank of Deputy Commissioner can issue notice to an
operator, asking him to furnish details relating to volume of the goods/services
supplied, stock of goods lying in warehouses/godowns etc. [Sub-section (12)]
• The operator is required to furnish such details within 15 working days. [Subsection
(13)]
• In case an operator fails to furnish the information, besides being liable for penal
action under section 122, it shall also be liable for penalty up to ` 25,000. [Sub-
section (14)]
Other key concepts relating to TCS Registration:

The e-commerce operator as well as the supplier supplying goods or services through
an operator need to compulsorily register under GST. The threshold limit of 20 lakhs
(10 lakhs for special category states) is not applicable to them. Section 24(x) of the
CGST Act, 2017 makes it mandatory for every e-commerce operator to get registered
under GST. Similarly, section 24(ix) of the CGST Act, 2017 makes it mandatory for
every person who supplies goods/services through an operator to get registered under
GST.
TCS Statement:
The amount of tax collected by the operator is required to be deposited by the 10th of
the following month, during which such collection is made. The operator is also
required to furnish a monthly statement in Form GSTR-8 by the 10th of the following
month. The operator is also required to file an Annual statement in prescribed form by
the 31st of December following the end of every financial year. The operator can rectify
errors in the statements filed, if any, latest by the return to be filed for the month of
September, following the end of every financial year. The details furnished by the
operator in GSTR-8 shall be made available electronically to each of the suppliers in
Part C of FORM GSTR-2A on the common portal after the due date of filing of FORM
GSTR-8.
Section 53: Transfer of input tax credit
On utilisation of input tax credit availed under this Act for payment of tax dues under
the Integrated Goods and Services Tax Act in accordance with the provisions of sub-
section (5) of section 49, as reflected in the valid return furnished under sub-section
(1) of section 39, the amount collected as central tax shall stand reduced by an amount
equal to such credit so utilised and the Central Government shall transfer an amount
equal to the amount so reduced from the central tax account to the integrated tax
account in such manner and within such time as may be prescribed.
Rule 89. Application for refund of tax, interest, penalty, fees or any
other amount. -
(1) Any person, except the persons covered under notification issued under section
55,claiming refund of any tax, interest, penalty, fees or any other amount paid by
him, other than refund of integrated tax paid on goods exported out of India, may
file an application electronically in FORM GST RFD-01through the common portal,
either directly or through a Facilitation Centre notified by the Commissioner:
Provided that any claim for refund relating to balance in the electronic cash ledger
in accordance with the provisions of sub-section (6) of section 49 may be made
through the return furnished for the relevant tax period in FORM GSTR-3 or FORM
GSTR-4 or
FORM GSTR-7, as the case may be:
Provided further that in respect of supplies to a Special Economic Zone unit or a

Special Economic Zone developer, the application for refund shall be filed by the –
a) supplier of goods after such goods have been admitted in full in the
SpecialbEconomic Zone for authorised operations, as endorsed by the
specified officer of the Zone;
b) supplier of services along with such evidence regarding receipt of services for
authorised operations as endorsed by the specified officer of the Zone:
Following proviso Amended by N/No. 47/2017 dt 18th Oct 2017

Provided also that in respect of supplies regarded as deemed exports, the
application may be filed by-
(a) the recipient of deemed export supplies; or
(b) the supplier of deemed export supplies in cases where the recipient does not
avail of input tax credit on such supplies and furnishes an undertaking to the effect
that the supplier may claim the refund
Notification No. 48/2017-Central Tax: 18th October, 2017

the Central Government, on the recommendations of the Council, hereby
notifies the supplies of goods listed in Table below as deemed exports,
namely: -
Table
S.No Description of supply
1. Supply of goods by a registered person against Advance
Authorisation
2. Supply of capital goods by a registered person against Export
Promotion Capital Goods Authorisation
3. Supply of goods by a registered person to Export Oriented Unit
4. Supply of gold by a bank or Public Sector Undertaking specified in
the notification No. 50/2017-Customs, dated the 30th June, 2017
(as amended) against Advance Authorisation.
Explanation -
For the purposes of this notification, –
1. “Advance Authorisation” means an authorisation issued by the Director
General of Foreign Trade under Chapter 4 of the Foreign Trade Policy 2015-
20 for import or domestic procurement of inputs on pre-import basis for
physical exports.
2. Export Promotion Capital Goods Authorisation means an authorisation
issued by the Director General of Foreign Trade under Chapter 5 of the Foreign
Trade Policy 2015- 20 for import of capital goods for physical exports.
3. “Export Oriented Unit” means an Export Oriented Unit or Electronic
Hardware Technology Park Unit or Software Technology Park Unit or Bio-
Technology Park Unit approved in accordance with the provisions of Chapter
6 of the Foreign Trade Policy 2015-20.
Provided also that refund of any amount, after adjusting the tax payable by the
applicant out of the advance tax deposited by him under section 27 at the time of
registration, shall be claimed in the last return required to be furnished by him.
(2) The application under sub-rule (1) shall be accompanied by any of the following
documentary evidences in Annexure 1 in Form GST RFD-01, as applicable, to
establish that a refund is due to the applicant, namely: -
(a) the reference number of the order and a copy of the order passed by the proper
officer or an appellate authority or Appellate Tribunal or court resulting in such
refund or reference number of the payment of the amount specified in
subsection (6) of section 107 and sub-section (8) of section 112 claimed as
refund;
(b) a statement containing the number and date of shipping bills or bills of export
and the number and the date of the relevant export invoices, in a case where
the refund is on account of export of goods;
(c) a statement containing the number and date of invoices and the relevant Bank
Realisation Certificates or Foreign Inward Remittance Certificates, as the case
may be, in a case where the refund is on account of the export of services
(d) a statement containing the number and date of invoices as provided in rule 46
along with the evidence regarding the endorsement specified in the second
proviso to sub-rule (1) in the case of the supply of goods made to a Special
Economic Zone unit or a Special Economic Zone developer;
(e) a statement containing the number and date of invoices, the evidence regarding
the endorsement specified in the second proviso to sub-rule (1) and the details
of payment, along with the proof thereof, made by the recipient to the supplier
for authorised operations as defined under the Special Economic Zone Act,
2005, in a case where the refund is on account of supply of services made to a
Special Economic Zone unit or a Special Economic Zone developer;
(f) a declaration to the effect that the Special Economic Zone unit or the Special
Economic Zone developer has not availed the input tax credit of the tax paid by
the supplier of goods or services or both, in a case where the refund is on
account of supply of goods or services made to a Special Economic Zone unit
or a Special Economic Zone developer
(g) a statement containing the number and date of invoices along with such other
evidence as may be notified in this behalf, in a case where the refund is on
account of deemed exports;
Notification No. 49/2017-Central Tax: 18th October, 2017

The Central Government hereby notifies the following, as detailed in the
Table below, as evidences which are required to be produced by the
supplier of deemed export supplies for claiming refund, namely: -
Table
S.No. Evidence
1. Acknowledgment by the jurisdictional Tax officer of the Advance
Authorisation holder or Export Promotion Capital Goods
Authorisation holder, as the case may be, that the said deemed
export supplies have been received by the said Advance
Authorisation or Export Promotion Capital Goods Authorisation

holder, or a copy of the tax invoice under which such supplies
have been made by the supplier, duly signed by the recipient
Export Oriented Unit that said deemed export supplies have
been received by it.
2. An undertaking by the recipient of deemed export supplies that
no input tax credit on such supplies has been availed of by him.
3. An undertaking by the recipient of deemed export supplies that
he shall not claim the refund in respect of such supplies and the
supplier may claim the refund.
(h) a statement containing the number and the date of the invoices received and
issued during a tax period in a case where the claim pertains to refund of any
unutilised input tax credit under sub-section (3) of section 54 where the credit
has accumulated on account of the rate of tax on the inputs being higher than
the rate of tax on output supplies, other than nil-rated or fully exempt supplies;
(i) the reference number of the final assessment order and a copy of the said order
in a case where the refund arises on account ofthe finalisation of provisional
assessment;
(j) a statement showing the details of transactions considered as intra-State
supply but which is subsequently held to be inter-State supply;
(k) a statement showing the details of the amount of claim on account of excess
payment of tax;
(l) a declaration to the effect that the incidence of tax, interest or any other amount
claimed as refund has not been passed on to any other person, in a case where
the amount of refund claimed does not exceed two lakh rupees:
Provided that a declaration is not required to be furnished in respect of the

cases covered under clause (a) or clause (b) or clause (c) or clause (d) or
clause (f) of sub-section (8) of section 54;
(m)a Certificate in Annexure 2 of FORM GST RFD-01 issued by a chartered
accountant or a cost accountant to the effect that the incidence of tax, interest
or any other amount claimed as refund has not been passed on to any other
person, in a case where the amount of refund claimed exceeds two lakh rupees:
Provided that a certificate is not required to be furnished in respect of cases

covered under clause (a) or clause (b) or clause (c) or clause (d) or clause (f)
of subsection (8) of section 54;
Explanation. – For the purposes of this rule

(i) in case of refunds referred to in clause (c) of sub-section (8) of section 54, the
expression “invoice” means invoice conforming to the provisions contained in
section 31;
(ii) where the amount of tax has been recovered from the recipient, it shall be
deemed that the incidence of tax has been passed on to the ultimate
consumer.
(3) Where the application relates to refund of input tax credit, the electronic credit
ledger shall be debited by the applicant by an amount equal to the refund so
claimed.
(4) In the case of zero-rated supply of goods or services or both without payment of
tax under bond or letter of undertaking in accordance with the provisions of sub-
section (3) of section 16 of the Integrated Goods and Services Tax Act, 2017,
refund of input tax credit shall be granted as per the following formula –
Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-
rated supply of services) x Net ITC ÷Adjusted Total Turnover
Where, -
(A) "Refund amount" means the maximum refund that is admissible;
(B) "Net ITC" means input tax credit availed on inputs and input services during
the relevant period other than the input tax credit availed for which refund is
claimed under sub-rules (4A) or (4B) or both;
(C) "Turnover of zero-rated supply of goods" means the value of zero-rated supply
of goods made during the relevant period without payment of tax under bond
or letter of undertaking, other than the turnover of supplies in respect of which
refund is claimed under sub-rules (4A) or (4B) or both;
(D) "Turnover of zero-rated supply of services" means the value of zero-rated
supply of services made without payment of tax under bond or letter of
undertaking, calculated in the following manner, namely: -
Zero-rated supply of services is the aggregate of the payments received
during the relevant period for zero-rated supply of services and zero-rated
supply of services where supply has been completed for which payment had
been received in advance in any period prior to the relevant period reduced
by advances received for zero-rated supply of services for which the supply
of services has not been completed during the relevant period;
(E) “Adjusted Total Turnover” means the sum total of the value of-
(a) the turnover in a State or a Union territory, as defined in section 2(112),
excluding the turnover of services; and
(b) the turnover of zero-rated supply of services determined in terms of clause

(D) above and non-zero-rated supply of services,
excluding-
(i) the value of exempt supplies other than zero-rated supplies; and
(ii) the turnover of supplies in respect of which refund is claimed under sub-
rule (4A) or sub-rule (4B) or both, if any,
during the relevant period.’.
(F) “Relevant period” means the period for which the claim has been filed.
Circular No. 37/11/2018 GST dated 15.03.2018 has clarified that the relevant
period has been defined in the context of the refund claim and is not linked to a
tax period. The exporter, at his option, may file refund claim for one calendar
month / quarter or by clubbing successive calendar months / quarters. The
calendar month(s) / quarter(s) for which refund claim has been filed, however,
cannot spread across different financial years.
(4A) In the case of supplies received on which the supplier has availed the benefit of
notification No. 48/2017-Central Tax, (i.e., where supplier has claimed refund of
tax paid on deemed exports) refund of input tax credit, availed in respect of other
inputs or input services used in making zero-rated supply of goods or services or
both, shall be granted.
(4B) In the case of supplies received on which the supplier has availed the benefit of
notification No. 40/2017-Central Tax (Rate) or notification No. 41/2017-Integrated
Tax (Rate) [concessional rate of tax @ 0.1% (0.05% CGST + 0.05% SGST &
0.1% IGST) for supply of goods made to merchant exporters for export] or
notification No. 78/2017-Customs or notification No. 79/2017-Customs, or all of
them, [imports of goods by EOUs/ Advance Authorisation / EPCG schemes]
refund of input tax credit, availed in respect of inputs received under the said
notifications for export of goods and the input tax credit availed in respect of other
inputs or input services to the extent used in making such export of goods, shall
be granted
(5) In the case of refund on account of inverted duty structure, refund of input tax
credit shall be granted as per the following formula –
Maximum Refund Amount = {(Turnover of inverted rated supply of goods and
services) x Net ITC ÷ Adjusted Total Turnover} - tax payable on such inverted
rated supply of goods and services
Explanation. -
(a) “Net ITC” shall mean input tax credit availed on inputs during the relevant
period other than the input tax credit availed for which refund is claimed under
sub-rules (4A) or (4B) or both; and
(b) “Adjusted Total turnover” shall have the same meaning as assigned to it in
sub-rule (4).”;
Rule 97. Consumer Welfare Fund. -

(1) All amounts of duty/central tax/ integrated tax /Union territory tax/cess and income
from investment along with other monies specified in section 12C(2) of the Central
Excise Act, 1944, section 57 of the Central Goods and Services Tax Act, 2017 read
with section 20 of the Integrated Goods and Services Tax Act, 2017, section 21 of the
Union Territory Goods and Services Tax Act, 2017 and section 12 of the Goods and
Services Tax (Compensation to States) Act, 2017 shall be credited to the Fund:
Provided that an amount equivalent to 50% of the amount of integrated tax determined
under sub-section (5) of section 54 of the Central Goods and Services Tax Act, 2017,
read with section 20 of the Integrated Goods and Services Tax Act, 2017, shall be
deposited in the Fund.
Provided further that an amount equivalent to 50% of the amount of cess determined
under sub-section (5) of section 54 read with section 11 of the Goods and Services
Tax (Compensation to States) Act, 2017, shall be deposited in the Fund.
(2) Where any amount, having been credited to the Fund, is ordered or directed to be
paid to any claimant by the proper officer, appellate authority or court, the same shall
be paid from the Fund.
(3) Accounts of the Fund maintained by the Central Government shall be subject to
audit by the Comptroller and Auditor General of India.
(4) The Government shall, by an order, constitute a Standing Committee (hereinafter

referred to as the „Committee‟) with a Chairman, a Vice-Chairman, a Member
Secretary and such other members as it may deem fit and the Committee shall make
recommendations for proper utilisation of the money credited to the Fund for welfare
of the consumers.
(5)
(a) The Committee shall meet as and when necessary, generally four times in a
year;
(b) the Committee shall meet at such time and place as the Chairman, or in his
absence, the Vice-Chairman of the Committee may deem fit;
(c) the meeting of the Committee shall be presided over by the Chairman, or in his
absence, by the Vice-Chairman;
(d) the meeting of the Committee shall be called, after giving at least ten days‟ notice
in writing to every member;
(e) the notice of the meeting of the Committee shall specify the place, date and hour
of the meeting and shall contain statement of business to be transacted thereat;
(f) no proceeding of the Committee shall be valid, unless it is presided over by the
Chairman or Vice-Chairman and attended by a minimum of three other members.
(6) The Committee shall have powers -
(a) to require any applicant to get registered with any authority as the Central
Government may specify;
(b) to require any applicant to produce before it, or before a duly authorised officer
of the Central Government or the State Government, as the case may be, such
books, accounts, documents, instruments, or commodities in custody and control
of the applicant, as may be necessary for proper evaluation of the application;
(c) to require any applicant to allow entry and inspection of any premises, from which
activities claimed to be for the welfare of consumers are stated to be carried on,
to a duly authorised officer of the Central Government or the State Government,
as the case may be;
(d) to get the accounts of the applicants audited, for ensuring proper utilisation of the
grant;
(e) to require any applicant, in case of any default, or suppression of material
information on his part, to refund in lump-sum along with accrued interest, the
sanctioned grant to the Committee, and to be subject to prosecution under the
Act;
(f) to recover any sum due from any applicant in accordance with the provisions of
the Act;
(g) to require any applicant, or class of applicants to submit a periodical report,
indicating proper utilisation of the grant;
(h) to reject an application placed before it on account of factual inconsistency, or
inaccuracy in material particulars;
(i) to recommend minimum financial assistance, by way of grant to an applicant,
having regard to his financial status, and importance and utility of the nature of
activity under pursuit, after ensuring that the financial assistance provided shall
not be misutilised;
(j) to identify beneficial and safe sectors, where investments out of Fund may be
made, and make recommendations, accordingly;
(k) to relax the conditions required for the period of engagement in consumer welfare
activities of an applicant;
(l) to make guidelines for the management, and administration of the Fund.
(7) The Committee shall not consider an application, unless it has been inquired into,
in material details and recommended for consideration accordingly, by the Member
Secretary.
(8) The Committee shall make recommendations: -

(a) for making available grants to any applicant;
(b) for investment of the money available in the Fund;
(c) for making available grants (on selective basis) for reimbursing legal expenses
incurred by a complainant, or class of complainants in a consumer dispute, after
its final adjudication;
(d) for making available grants for any other purpose recommended by the Central
Consumer Protection Council (as may be considered appropriate by the
Committee);
(e) for making available up to 50% of the funds credited to the Fund each year, for
publicity/ consumer awareness on GST, provided the availability of funds for
consumer welfare activities of the Department of Consumer Affairs is not less
than twenty-five crore rupees per annum.
Explanation. - For the purposes of this rule,

(a) 'Act' means the Central Goods and Services Tax Act, 2017 (12 of 2017), or the
Central Excise Act, 1944 (1 of 1944) as the case may be;
(b) 'applicant' means,

(i) the Central Government or State Government;
(ii) regulatory authorities or autonomous bodies constituted under an Act of
Parliament or the Legislature of a State or Union Territory;
(iii) any agency or organization engaged in consumer welfare activities for a
minimum period of three years, registered under the Companies Act, 2013 or
under any other law for the time being in force;
(iv) village or Mandal or samiti or samiti level co-operatives of consumers
especially Women, Scheduled Castes and Scheduled Tribes;
(v) an educational or research institution incorporated by an Act of Parliament or
the Legislature of a State or Union Territory in India or other educational
institutions established by an Act of Parliament or declared to be deemed as
a University under section 3 of the University Grants Commission Act, 1956
and which has consumers studies as part of its curriculum for a minimum
period of three years; and
(vi) a complainant as defined under clause (b) of sub-section (1) of section 2 of
the Consumer Protection Act, 1986, who applies for reimbursement of legal
expenses incurred by him in a case instituted by him in a consumer dispute
redressal agency.
(c) 'application' means an application in the form as specified by the Standing
Committee from time to time;
(d) 'Central Consumer Protection Council' means the Central Consumer Protection
Council, established under sub-section (1) of section 4 of the Consumer Protection
Act, 1986, for promotion and protection of rights of consumers;
(e) 'Committee' means the Committee constituted under sub-rule (4);
(f) 'consumer' has the same meaning as assigned to it in clause (d) of sub-section (1)
of section 2 of the Consumer Protection Act, 1986, and includes consumer of goods
on which central tax has been paid;
(g) „duty‟ means the duty paid under the Central Excise Act, 1944 or the Customs Act,
1962;
(h) „Fund‟ means the Consumer Welfare Fund established by the Central Government
under sub-section (1) of section 12C of the Central Excise Act, 1944 and section 57
of the Central Goods and Services Tax Act, 2017;
(i) 'proper officer' means the officer having the power under the Act to make an order
that the whole or any part of the central tax is refundable;
Refund of Integrated tax on export of Goods

Rule 96. Refund of integrated tax paid on goods or services exported
out of India. -
(1) The shipping bill filed by an exporter of goods 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: -
(a) 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
(b) the applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR-
3B, as the case may be;
(2) The details of the relevant export invoices in respect of export of goods contained
in FORM GSTR-1 shall be transmitted electronically by the common portal to the
system designated by the Customs and the said system shall electronically
transmit to the common portal, a confirmation that the goods covered by the said
invoices have been exported out of India.
Provided that where the date for furnishing the details of outward supplies in FORM
GSTR-1 for a tax period has been extended in exercise of the powers conferred
under section 37 of the Act, the supplier shall furnish the information relating to
exports as specified in Table 6A of FORM GSTR-1 after the return in FORM GSTR-
3B has been furnished and the same shall be transmitted electronically by the
common portal to the system designated by the Customs:
Provided further that the information in Table 6A furnished under the first proviso
shall be auto-drafted in FORM GSTR-1 for the said tax period.
(3) Upon the receipt of the information regarding the furnishing of a valid return in
FORM GSTR-3or FORM GSTR-3B, as the case may be from the common portal,
the system designated by the Customs or the proper officer of Customs, as the
case may be, shall process the claim of refund in respect of export of goods 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 and as intimated to the Customs
authorities..
(4) The claim for refund shall be withheld where, -

(a) a request has been received from the jurisdictional Commissioner of central
tax, State tax or Union territory tax to withhold the payment of refund due to the
person claiming refund in accordance with the provisions of sub-section (10) or

sub-section (11) of section 54; or
(b) the proper officer of Customs determines that the goods were exported in
violation of the provisions of the Customs Act, 1962.
(5) Where refund is withheld in accordance with the provisions of clause (a) of sub-
rule (4), bthe proper officer of integrated tax at the Customs station shall intimate
the applicant and the jurisdictional Commissioner of central tax, State tax or Union
territory tax, as the case may be, and a copy of such intimation shall be transmitted
to the common portal.
(6) Upon transmission of the intimation under sub-rule (5), the proper officer of central
taxbor State tax or Union territory tax, as the case may be, shall pass an order in
Part B of FORM GST RFD-07.
(7) Where the applicant becomes entitled to refund of the amount withheld under
clause (a) of sub-rule (4), the concerned jurisdictional officer of central tax, State
tax or Union territory tax, as the case may be, shall proceed to refund the amount
after passing an order in FORM GST RFD-06.
(8) The Central Government may pay refund of the integrated tax to the Government
of Bhutan on the exports to Bhutan for such class of goods as may be notified in
this behalf and where such refund is paid to the Government of Bhutan, the
exporter shall not be paid any refund of the integrated tax.
(9) The application for refund of integrated tax paid on the services exported out of
India shall be filed in FORM GST RFD-01 and shall be dealt with in accordance
with the provisions of rule 89
(10) The persons claiming refund of integrated tax paid on exports of goods or
services should not have-
(a) received supplies on which the benefit of notification No. 48/2017-Central Tax,
or notification No. 40/2017-Central Tax (Rate), or notification No. 41/2017-
Integrated Tax (Rate), has been availed; or
(b) availed the benefit under notification No. 78/2017-Customs, or notification No.
79/2017-Customs.
Rule 138. Information to be furnished prior to commencement of

movement of goods and generation of e-way bill. -
(1) Every registered person who causes movement of goods of consignment value
exceeding 50,000 rupees—
(i) in relation to a supply; or
(ii) for reasons other than supply; or
(iii) due to inward supply from an unregistered person,
shall, before commencement of such movement, furnish information relating to
the said goods as specified in Part A of FORM GST EWB-01, electronically, on
the common portal along with such other information as may be required at the
common portal and a unique number will be generated on the said portal:
Provided that the transporter, on an authorization received from the registered

person, may furnish information in Part A of FORM GST EWB-01, electronically,
on the common portal along with such other information as may be required on
the common portal and a unique number will be generated on the said portal:
Provided further that where the goods to be transported are supplied through an
ecommerce operator or a courier agency, on an authorization received from the
consignor, the information in Part A of FORM GST EWB-01 may be furnished by
such e-commerce operator or courier agency and a unique number will be
generated on the said portal:
Provided also that where goods are sent by a principal located in one State or
Union territory to a job worker located in any other State or Union territory, the e-
way bill shall be generated either by the principal or the job worker, if registered,
irrespective of the value of the consignment:
Provided also that where handicraft goods are transported from one State or
Union territory to another State or Union territory by a person who has been
exempted from the requirement of obtaining registration under clauses (i) and (ii)
of section 24, the e-way bill shall be generated by the said person irrespective of
the value of the consignment.
Explanation 1. – For the purposes of this rule, the expression “handicraft goods”
has the meaning as assigned to it in the Government of India, Ministry of Finance,
notification No.32/2017-Central Tax dated the 15th September, 2017.
Explanation 2.- For the purposes of this rule, the consignment value of goods
shall be the value, determined in accordance with the provisions of section 15,
declared in an invoice, a bill of supply or a delivery challan, as the case may be,
issued in respect of the said consignment and also includes the central tax, State
or Union territory tax, integrated tax and cess charged, if any, in the document
and shall exclude the value of exempt supply of goods where the invoice is issued
in respect of both exempt and taxable supply of goods.
(2) Where the goods are transported by the registered person as a consignor or
the recipient of supply as the consignee, whether in his own conveyance or a
hired one or by railways or by air or by vessel, the said person or the recipient
may generate the e-way bill in FORM GST EWB-01 electronically on the
common portal after furnishing information in Part B of FORM GST EWB-01:
(2A) Where the goods are transported by railways or by air or vessel, the e-way
bill shall be generated by the registered person, being the supplier or the
recipient, who shall, either before or after the commencement of movement,
furnish, on the common portal, the information in Part B of FORM GST EWB-
01:
Provided that where the goods are transported by railways, the railways shall
not deliver the goods unless the e-way bill required under these rules is
produced at the time of delivery.
(3) Where the e-way bill is not generated under sub-rule (2) and the goods are
handed over to a transporter for transportation by road, the registered person
shall furnish the information relating to the transporter on the common portal
and the e-way bill shall be generated by the transporter on the said portal on
the basis of the information furnished by the registered person in Part A of
FORM GST EWB-01:
Provided that the registered person or, the transporter, as the case may be may,
at his option, generate and carry the e-way bill even if the value of the
consignment is less than 50,000 rupees:
Provided further that where the movement is caused by an unregistered person

either in his own conveyance or a hired one or through a transporter, he or the
transporter may, at their option, generate the e-way bill in FORM GST EWB-01
on the common portal in the manner specified in this rule:
Provided also that where the goods are transported for a distance of upto 50
kilometers within the State or Union territory from the place of business of the
consignor to the place of business of the transporter for further transportation,
the supplier or the recipient, or as the case maybe, the transporter may not
furnish the details of conveyance in Part B of FORM GST EWB-01.
Explanation 1. – For the purposes of this sub-rule, where the goods are supplied
by an unregistered supplier to a recipient who is registered, the movement shall
be said to be caused by such recipient if the recipient is known at the time of
commencement of the movement of goods.
Explanation 2.- The e-way bill shall not be valid for movement of goods by road
unless the information in Part-B of FORM GST EWB-01 has been furnished
except in the case of movements covered under the third proviso to sub-rule (3)
and the proviso to sub-rule (5).
(4) Upon generation of the e-way bill on the common portal, a unique e-way bill
number (EBN) shall be made available to the supplier, the recipient and the
transporter on the common portal.
(5) Where the goods are transferred from one conveyance to another, the
consigner or the recipient, who has provided information in Part- A of the FORM
GST EWB-01, or the transporter shall, before such transfer and further
movement of goods, update the details of conveyance in the e-way bill on the
common portal in FORM GST EWB-01:
Provided that where the goods are transported for a distance of less than 50
kilometers within the State or Union territory from the place of business of the
transporter finally to the place of business of the consignee, the details of
conveyance may not be updated in the e-way bill.
(5A) The consignor or the recipient, who has furnished the information in Part-A of
FORM GST EWB-01, or the transporter, may assign the e-way bill number to
another registered or enrolled transporter for updating the information in Part-
B of FORM GST EWB-01 for further movement of consignment:
Provided that once the details of the conveyance have been updated by the
transporter in Part B of FORM GST EWB-01, the consignor or recipient, as the
case maybe, who has furnished the information in Part-A of FORM GST EWB-
01 shall not be allowed to assign the e-way bill number to another transporter.
(6) After e-way bill has been generated in accordance with the provisions of sub-
rule (1), where multiple consignments are intended to be transported in one
conveyance, the transporter may indicate the serial number of e-way bills
generated in respect of each such consignment electronically on the common
portal and a consolidated e-way bill in FORM GST EWB-02 maybe generated
by him on the said common portal prior to the movement of goods.
(7) Where the consignor or the consignee has not generated the e-way bill in FORM
GST EWB-01 and the aggregate of the consignment value of goods carried in
the conveyance is more than 50,000 rupees, the transporter, except in case of
transportation of goods by railways, air and vessel, shall, in respect of inter-
State supply, generate the e-way bill in FORM GST EWB-01 on the basis of
invoice or bill of supply or delivery challan, as the case may be, and may also
generate a consolidated e-way bill in FORM GST EWB-02 on the common

portal prior to the movement of goods:
Provided that where the goods to be transported are supplied through an e-

commerce operator or a courier agency, the information in Part A of FORM
GST EWB-01 may be furnished by such e-commerce operator or courier
agency.
(8) The information furnished in Part A of FORM GST EWB-01 shall be made
available to the registered supplier on the common portal who may utilize the
same for furnishing details in FORM GSTR-1:
Provided that when the information has been furnished by an unregistered

supplier or an unregistered recipient in FORM GST EWB-01, he shall be
informed electronically, if the mobile number or the e-mail is available.
(9) Where an e-way bill has been generated under this rule, but goods are either
not transported or are not transported as per the details furnished in the e-way
bill, the e-way bill may be cancelled electronically on the common portal within
24 hours of generation of the e-way bill:
Provided that an e-way bill cannot be cancelled if it has been verified in transit
in accordance with the provisions of rule 138B:
Provided further the unique number generated under sub-rule (1) shall be valid
for a period of 15 days for updation of Part B of FORM GST EWB-01.
(10) An e-way bill or a consolidated e-way bill generated under this rule shall be
valid for the period as mentioned in column (3) of the Table below from the
relevant date, for the distance, within the country, the goods have to be
transported, as mentioned in column (2) of the said Table: -
Sl. No. Distance Validity period

(1) (2) (3)
1. Upto 100 km. One day in cases other than Over
Dimensional Cargo
2. For every 100 km. or part One additional day in cases other
thereof thereafter than Over Dimensional Cargo
1. Upto 20 km One day in cases of Over
Dimensional Cargo
For every 20 km. or part One additional day in case of Over
thereof thereafter Dimensional Cargo
Provided that the Commissioner may, on the recommendations of the Council,

by notification, extend the validity period of e-way bill for certain categories of
goods as may be specified therein:
Provided further that where, under circumstances of an exceptional nature,

including trans-shipment, the goods cannot be transported within the validity
period of the e-way bill, the transporter may extend the validity period after
updating the details in Part B of FORM GST EWB-01, if required...
Explanation 1.—For the purposes of this rule, the “relevant date” shall mean
the date on which the e-way bill has been generated and the period of validity
shall be counted from the time at which the e-way bill has been generated and
each day shall be counted as the period expiring at midnight of the day
immediately following the date of generation of e-way bill.
Explanation 2. — For the purposes of this rule, the expression “Over

Dimensional Cargo”
shall mean a cargo carried as a single indivisible unit and which exceeds the
dimensional
limits prescribed in rule 93 of the Central Motor Vehicle Rules, 1989, made
under the Motor Vehicles Act, 1988
(11) The details of e-way bill generated under sub-rule (1) shall be made available
to the-
(a) supplier, if registered, where the information in Part A of FORM GST
EWB-01 has been furnished by the recipient or the transporter; or
(b) recipient, if registered, where the information in Part A of FORM GST
EWB-01 has been furnished by the supplier or the transporter,
on the common portal, and the supplier or the recipient, as the case maybe,
shall communicate his acceptance or rejection of the consignment covered
by the e-way bill.
(12) Where the person to whom the information specified in sub-rule (11) has been
made available does not communicate his acceptance or rejection within
seventy-two hours of the details being made available to him on the common
portal, or the time of delivery of goods whichever is earlier, it shall be deemed
that he has accepted the said details.
(13) The e-way bill generated under this rule or under rule 138 of the Goods and
Services Tax Rules of any State shall be valid in every State and Union
territory.
(14) Notwithstanding anything contained in this rule, no e-way bill is required to be

generated—
(a) where the goods being transported are specified in Annexure;

(b) where the goods are being transported by a non-motorised conveyance;
(c) where the goods are being transported from the customs port, airport, air
cargo complex and land customs station to an inland container depot or
a container freight station for clearance by Customs;
(d) in respect of movement of goods within such areas as are notified under
clause (d) of sub-rule (14) of rule 138 of the State or Union territory
Goods and Services Tax Rules in that particular State or Union territory;
(e) where the goods, other than de-oiled cake, being transported are
specified in the Schedule appended to notification No. 2/2017- Central
tax (Rate) dated the 28th June, 2017;
(f) where the goods being transported are alcoholic liquor for human
consumption, petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas or aviation turbine fuel; and
(g) where the goods being transported are treated as no supply under
Schedule III of the Act.
(h) where the goods are being transported—
(i) under customs bond from an inland container depot or a container
freight station to a customs port, airport, air cargo complex and land
customs station, or from one customs station or customs port to
another customs station or customs port, or
(ii) under customs supervision or under customs seal;
(i) where the goods being transported are transit cargo from or to Nepal or
Bhutan;
(j) where the goods being transported are exempt from tax under
notification No. 7/2017-Central Tax (Rate), dated 28th June 2017 and
notification No. 26/2017- Central Tax (Rate), dated the 21st September,
2017 as amended from time to time;
(k) any movement of goods caused by defence formation under Ministry of
defence as a consignor or consignee;
(l) where the consignor of goods is the Central Government, Government
of any State or a local authority for transport of goods by rail;
(m) where empty cargo containers are being transported; and
(n) where the goods are being transported upto a distance of 20 kilometers
from the place of the business of the consignor to a weighbridge for
weighment or from the weighbridge back to the place of the business of
the said consignor subject to the condition that the movement of goods
is accompanied by a delivery challan issued in accordance with rule 55.
(o) where empty cylinders for packing of liquefied petroleum gas are being
moved for reasons other than supply
Explanation. - The facility of generation and cancellation of e-way bill may also
be made available through SMS to the supplier, recipient and the transporter,
as the case may be.
ANNEXURE
[(See rule 138 (14)]
S. Description of Goods
No.
(1) (2)
1. Liquefied petroleum gas for supply to household and non-domestic
exempted category (NDEC) customers
2. Kerosene oil sold under PDS
3. Postal baggage transported by Department of Posts
4. Natural or cultured pearls and precious or semi-precious stones;
precious metals and metals clad with precious metal (Chapter 71)
5. Jewellery, goldsmiths’ and silversmiths’ wares and other articles
(Chapter 71)
6. Currency
7. Used personal and household effects
8. Coral, unworked (0508) and worked coral (9601)
Rule 138A. Documents and devices to be carried by a person-in-

charge of a conveyance. -
(1) The person in charge of a conveyance shall carry—
(a) the invoice or bill of supply or delivery challan, as the case may be; and
(b) a copy of the e-way bill in physical form or the e-way bill number in electronic
form or mapped to a Radio Frequency Identification Device embedded on to
the conveyance in such manner as may be notified by the Commissioner.
Provided that nothing contained in clause (b) of this sub-rule shall apply in case
of movement of goods by rail or by air or vessel.
Provided further that in case of imported goods, the person in charge of a
conveyance shall also carry a copy of the bill of entry filed by the importer of such
goods and shall indicate the number and date of the bill of entry in Part A of
FORM GST EWB-01
(2) A registered person may obtain an Invoice Reference Number from the common
portal by uploading, on the said portal, a tax invoice issued by him in FORM GST
INV-1 and produce the same for verification by the proper officer in lieu of the
tax invoice and such number shall be valid for a period of 30 days from the date
of uploading.
(3) Where the registered person uploads the invoice under sub-rule (2), the
information in Part A of FORM GST EWB-01 shall be auto-populated by the
common portal on the basis of the information furnished in FORM GST INV-1.
(4) The Commissioner may, by notification, require a class of transporters to obtain

a unique Radio Frequency Identification Device and get the said device
embedded on to the conveyance and map the e-way bill to the Radio Frequency
Identification Device prior to the movement of goods.
(5) Notwithstanding anything contained in clause (b) of sub-rule (1), where

circumstances so warrant, the Commissioner may, by notification, require the
person-in-charge of the conveyance to carry the following documents instead of
the e-way bill-
(a) tax invoice or bill of supply or bill of entry; or
(b) a delivery challan, where the goods are transported for reasons other than by
way of supply.
Rule 138B. Verification of documents and conveyances -

(1) The Commissioner or an officer empowered by him in this behalf may authorise
the proper officer to intercept any conveyance to verify the e-way bill physical
or electronic form for all inter-State and intra- State movement of goods.
(2) The Commissioner shall get Radio Frequency Identification Device readers
installed at places where the verification of movement of goods is required to
be carried out and verification of movement of vehicles shall be done through
such device readers where the e-way bill has been mapped with the said device.
(3) The physical verification of conveyances shall be carried out by the proper
officer as authorised by the Commissioner or an officer empowered by him in
this behalf:
Provided that on receipt of specific information on evasion of tax, physical

verification of a specific conveyance can also be carried out by any other officer
after obtaining necessary approval of the Commissioner or an officer authorised
by him in this behalf.
Rule 138C. Inspection and verification of goods. –

(1) A summary report of every inspection of goods in transit shall be recorded online
by the proper officer in Part A of FORM GST EWB-03 within 24 hours of
inspection and the final report in Part B of FORM GST EWB-03 shall be
recorded within 3 days of such inspection.
Provided that where the circumstances so warrant, the Commissioner, or any
other officer authorised by him, may, on sufficient cause being shown, extend
the time for recording of the final report in Part B of FORM EWB-03, for a further
period not exceeding 3 days.
Explanation. - The period of 24 hours or, as the case may be, 3 days shall be
counted from the midnight of the date on which the vehicle was intercepted.
(2) Where the physical verification of goods being transported on any conveyance
has been done during transit at one place within the State or Union territory or
in any other State or Union territory, no further physical verification of the said
conveyance shall be carried out again in the State or Union territory, unless a
specific information relating to evasion of tax is made available subsequently.
Rule138D. Facility for uploading information regarding detention

of vehicle. -
Where a vehicle has been intercepted and detained for a period exceeding 30
minutes, the transporter may upload the said information in FORM GST EWB-04 on
the common portal.
Explanation. - For the purposes of this Chapter, the expressions ‘transported by

railways’, ‘transportation of goods by railways’, ‘transport of goods by rail’ and
‘movement of goods by rail’ does not include cases where leasing of parcel space
by Railways takes place.
Part 2: Customs Duty
Types of Custom Duties

Customs Duties are imposed under the following Act’s
Customs Act, 1962 Customs Tariff Act, 1975
1. Basic Customs Duty 1. Sec 3(1): Additional Duty (CVD) (to compensate
excise duty on similar goods
2. Sec 3(5): Additional Duty (CVD) (to compensate VAT
on similar goods)
3. Sec 3(7): Integrated Tax (to countervail GST on similar
goods)
4. Sec 3(9): GST Compensation cess
5. Sec 6: Protective duty
6. Sec 8B: Safeguard duty
7. Sec 9: Duty on Subsidized Articles.

8. Sec 9A: Anti-dumping duty.
1. BASIC CUSTOMS DUTY

This is the duty levied under section 12 of customs Act. Normally, it is levied as
percentage of Value determined u/s 14(1).
The rate of duty specified in column (4) of 1st Schedule to CTA is applicable.
Preferential rate of duty:

Customs Tariff has 5 columns i.e. Heading No. Sub-Heading No. Description,
Standard rate of duty and Rate of duty for preferential area.
If the goods are imported from the areas notified by the Central Government to be
preferential areas, then the rate of duty under column (5) will be applicable.
The Government may by notification under section 25 of the Customs Act prescribe
preferential rate of duty in respect of imports from certain preferential areas.
Conditions to be fulfilled for preferential rate of duty: The importer will have to
fulfil the following conditions to make the imported goods eligible for preferential rate
of duty: -
a. At the time of importation, he should make a specific claim for the preferential
rate.
b. He should also claim that the goods are produced or manufactured in such
preferential area.
c. The area should be notified under section 4(3) of the Customs Tariff Act to be
a preferential area.
d. The origin of the goods shall be determined in accordance with the rules made
under section 4(2) of the Customs Tariff Act.
If the importer fails to fulfil these conditions, the goods shall be liable to standard rate
of duty.
2. ADDITIONAL DUTY OF CUSTOMS

Sec 3(1) of CTA, 1975
(i) It is imposed only on goods which are manufactured outside India and
imported into India.
(ii) It is in addition to basic customs duty.
(iii) Rate of Duty:
(a) It is equal to the excise duty for the time being leviable on a like article if
produced or manufactured in India.
(b) If a like article is not so produced or manufactured in India, then duty
which would be leviable on the class or description of articles to which
the imported article belongs
(c) If like articles are chargeable at different rates, then CVD shall be leviable
the highest of such rates.
(d) In case of any alcoholic liquor imported into India, the Central Government
may, specify the rate of additional duty having regard to the excise duty rates
in different states, or, if like alcoholic liquor is not produced or manufactured
in any state, then, having regard to excise duty rates in different states.
(iv) Value of goods:

(a) If excise duty is chargeable on Value: the CVD shall be calculated on
the aggregate of value of the imported article as computed u/s 14(1)
(transaction value) or 14(2) (tariff value) of Customs Act & Basic customs
duty.
(b) If excise duty is chargeable on MRP basis: if the imported goods are
also covered by SWM Act, and declaration of MRP is mandatory, then
value shall be
MRP so affixed – Abatement u/s 4A of CEA
[If more than one MRP is declared, the maximum of such MRP shall be
taken for the purposes of this section.]
(v) This is a customs duty even if rate of excise duty is considered for calculation
purposes. Thus, all the provisions of Customs Act will apply.
3. SPECIAL ADDITIONAL DUTY OF CUSTOMS (CVD of VAT): Sec

3(5) of CTA, 1975
(i) It is levied to countervail the effect of sales tax, local taxes or any other charges
for the time being leviable on like article on sale, purchase or transportation in
India.
If a like article is not so sold, purchased or transported, taxes which would be

leviable on the class / description of articles to which the imported article belongs.
Where such taxes / charges are leviable at different rates, the highest such tax /
charges.
(ii) Rate of duty: Central Government can notify the rate [4% as maximum].
Notification No. 53/2017. SAD leviable on following goods @ 4% w-e-f 1-7-17
Sl. No. Chapter or heading or sub-heading or Description of goods

tariff item of the First Schedule
(1) (2) (3)
1. 2709 00 00 Petroleum Crude
2. 2710 Motor spirit commonly

known as petrol
3. 2710 High speed diesel (HSD)
4. 2710 19 20 Aviation Turbine Fuel
5. 2711 11 00 Liquefied natural gas and

Natural Gas
2711 21 00
Note: Due to introduction of GST, the applicability of additional duty of customs is very limited.
GST is levied on all supplies of goods and /or services except supply of alcoholic liquor for human
consumption. Further, GST on the supply of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect
from such date as may be notified by the Government on the recommendations of the Council.
Thus, additional duty of customs will be levied only on the few products not leviable to GST.
4. INTEGRATED TAX (CVD of IGST) [Sec 3(7) of CTA]

Any article which is imported into India shall, in addition, be liable to integrated tax at
such rate, not exceeding 40% as is leviable u/s 5 of the IGST Act, 2017 on a like article
on its supply in India, on the value of the imported article as determined under sub-
section (8) or (8A).
Value for levy of Integrated Tax [Sec 3(8)]: Aggregate of—

(a) the value of the imported article determined u/s 14(1) of the Customs Act, 1962
or the tariff value fixed u/s 14(2), as the case may be; and
(b) any duty of customs chargeable u/s 12 of the Customs Act, 1962, and any sum
chargeable on that article under any law for the time being in force as an addition
to, and in the same manner as, a duty of customs,
but does not include Integrated tax referred to in sub-section (7) or GST compensation
cess referred to in sub-section (9)
Value, Where the goods deposited in a warehouse under the provisions of the
Customs Act, 1962 are sold to any person before clearance for home
consumption or export under the said Act [Sec 3(8A)]
the value of such goods for the purpose of calculating the integrated tax shall be, —
(a) where the whole of the goods is sold, the value determined under sub-
section (8) or the transaction value of such goods, whichever is higher; or
(b) where any part of the goods is sold, the proportionate value of such goods
as determined under sub-section (8) or the transaction value of such goods,
whichever is higher:
Provided that where the whole of the warehoused goods or any part thereof are sold
more than once before such clearance for home consumption or export, the
transaction value of the last such transaction shall be the transaction value for the
purposes of clause (a) or clause (b):
Provided further that in respect of warehoused goods which remain unsold, the value
or the proportionate value, as the case may be, of such goods shall be determined in
accordance with the provisions of sub-section (8).
Explanation. — For the purposes of this sub-section, the expression “transaction
value”, in relation to warehoused goods, means the amount paid or payable as
consideration for the sale of such goods.
Exemption: goods imported by Developer or SEZ or unit in SEZ [N/N 64/2017-

Customs dt 5th July, 2017]
5. GOODS AND SERVICES TAX COMPENSATION CESS [Sec 3(9) of

CTA]
Any article which is imported into India shall, in addition, be liable to the goods and
services tax compensation cess at such rate, as is leviable under section 8 of the
Goods and Services Tax (Compensation to States) Cess Act, 2017 on a like article on
its supply in India, on the value of the imported article as determined under sub-section
(10) or (10A).
Value for this purpose [Sec 3(10)]: Aggregate of—

(a) the value of the imported article determined u/s 14(1) of the Customs Act, 1962
or the tariff value fixed u/s 14(2), as the case may be; and
(b) any duty of customs chargeable u/s 12 of the Customs Act, 1962, and any sum
chargeable on that article under any law for the time being in force as an addition
to, and in the same manner as, a duty of customs,
but does not include Integrated tax referred to in sub-section (7) or GST compensation
cess referred to in sub-section (9)
Value, Where the goods deposited in a warehouse under the provisions of the
Customs Act, 1962 are sold to any person before clearance for home
consumption or export under the said Act [Sec 3(10A)]
the value of such goods for the purpose of calculating the integrated tax shall be, —
(a) where the whole of the goods is sold, the value determined under sub-
section (10) or the transaction value of such goods, whichever is higher; or
(b) where any part of the goods is sold, the proportionate value of such goods
as determined under sub-section (10) or the transaction value of such
goods, whichever is higher:
Provided that where the whole of the warehoused goods or any part thereof are sold
more than once before such clearance for home consumption or export, the
transaction value of the last such transaction shall be the transaction value for the
purposes of clause (a) or clause (b):
Provided further that in respect of warehoused goods which remain unsold, the value
or the proportionate value, as the case may be, of such goods shall be determined in
accordance with the provisions of sub-section (10).
Explanation. — For the purposes of this sub-section, the expression “transaction

value”, in relation to warehoused goods, means the amount paid or payable as
consideration for the sale of such goods.
6. NCCD of Customs
i. Duty imposed vide section 136 of Finance Act, 2001
ii. This duty is imposed on pan masala, chewing tobacco and cigarettes,
Polyester yarn, petroleum products, vehicles etc
iii. It varies from 1% to 45%.
7. Export duty
Levied only on few products
At present, Export Duty is levied only on hides, skins and leather, Snake skins hides,
and fur lamb skins. There is no export duty on any other product.
8. Social Welfare Surcharge on imported goods [Sec 110 of FA 2018]

Social Welfare Surcharge, is levied on the goods specified in the First Schedule to the
Customs Tariff Act, 1975, being the goods imported into India
Its purpose is to fulfil the commitment of the Government to provide and finance
education, health and social security.
Rate of Social Welfare Surcharge = 10% on the aggregate of duties, taxes and
cesses which are levied and collected by the Central Government under section 12 of
the Customs Act, 1962 and any sum chargeable on the goods under any other law for
the time being in force, as an addition to, and in the same manner as, a duty of
customs, but not including—
(a) the safeguard duty referred to in sections 8B and 8C of the Customs Tariff Act;
(b) the countervailing duty referred to in section 9 of the Customs Tariff Act;
(c) the anti-dumping duty referred to in section 9A of the Customs Tariff Act;
(d) the Social Welfare Surcharge on imported goods.
Exemption:
• N/N 13/2018: SWS will not be levied on Integrated tax, and GST
compensation cess
• Goods which were hitherto exempted from Education Cesses are exempted from
this Surcharge also.
• In addition, certain specified goods, attract the Surcharge at the rate of 3% of the
aggregate duties of customs only.
The Social Welfare Surcharge on imported goods shall be in addition to any other
duties of customs or tax or cess chargeable on such goods, under the Customs Act,
1962 or any other law for the time being in force.
The provisions of the Customs Act, 1962 and the rules and regulations made
thereunder, including those relating to assessment, non-levy, short-levy, refunds,
exemptions, interest, appeals, offences and penalties shall, as far as may be, apply in
relation to the levy and collection of the Social Welfare Surcharge on imported goods
as they apply in relation to the levy and collection of duties of customs on such goods
under the Customs Act, 1962 or the rules or the regulations, as the case may be.
9. Road and Infrastructure CESS [Sec 111 of FA 2018]

Road and Infrastructure Cess, is leved on the goods specified in the Sixth Schedule,
being the goods imported into India at the rates specified in the said Schedule for the
purpose of financing infrastructure projects.
The cess shall be in addition to any other duties of customs chargeable on scheduled
goods under the Customs Act, 1962 or any other law for the time being in force.
The provisions of the Customs Act, 1962 and the rules and regulations made
thereunder, including those relating to assessment, non-levy, short-levy, refunds,
exemptions, interest, appeals, offences and penalties shall, as far as may be, apply in
relation to the levy and collection of the additional duty of customs leviable under this
section in respect of scheduled goods as they apply in relation to the levy and
collection of the duties of customs on scheduled goods under the said Act or the rules
and regulations, as the case may be.
Motor spirit commonly known as petrol @ Rupee 8 per litre

High speed diesel oil @ Rupee 8 per litre
Sample Duty Calculation

How to calculate customs duty payable on the imported goods?
Case 1. Where product attracts IGST but not CVD
A. Assessable Value: Rs. 1,00,000
B. BCD @10% of A Rs. 10,000
C. SWS @ 10% of B Rs. 1,000
D. IGST @12% of A+B+C Rs. 13,320
E. Total Duty (B+C+D) Rs. 24,320
F. Effective Rate of Duty 24.32%
Case 2. Where product does not attract CVD but attract IGST as well as compensation
cess
B. BCD @10% of A Rs. 10,000
C. SWS @10% of B Rs. 1,000
D. IGST @ 12% of A+B+C Rs. 13,320
E. Compensation Cess @10% of A+B+C Rs. 11,100
F. Total Duty (B+C+D+E) Rs. 35,420
H. Effective Rate of Duty 35.42%
Case 3. Where product attract both CVD & IGST
B. BCD @10% of A Rs. 10,000
C. CVD @12% of A+B Rs. 13,200
D. SWS @ 10% of B+C Rs. 2,320
E. IGST @12% of A+B+C+D Rs. 15,062
F. Total Duty (B+C+D+E) Rs. 40,582
G. Effective Rate of Duty 40.58%
Case 4. Where product attract CVD, IGST& Compensation cess
B. BCD @10% of A Rs. 10,000
C. CVD @12% of A+B Rs. 13,200
D. SWS @10% of B+C Rs. 2,320
E. IGST @ 12% of A+B+C+D Rs. 15,062
F. Compensation Cess @10% of A+B+C+D Rs. 12,552
G. Total Duty (B+C+D+E+F) Rs. 53,134
H. Effective Rate of Duty 53.13%
TEST YOUR KNOWLEDGE

1. Determine the customs duty payable under the Customs Tariff Act, 1975
including the safeguard duty of 30% under section 8B of the said Act with the
following details available on hand:
Assessable value (including landing charges) of Sodium Nitrite 30,00,000

imported from a developing country from 26th February, 2019 to
25th February, 2020 (both days inclusive)
Share of imports of Sodium Nitrite from the developing country 4%
against total imports of Sodium Nitrite to India
Basic custom duty 10%
Integrated tax under section 3(7) of the Customs Tariff Act, 1975. 12%
Note: Ignore GST compensation cess.
Ans: Computation of customs duty payable thereon
Particular Amount
Assessable value of sodium nitrite imported 30,00,000
Basic custom duty @ 10% (30,00,000 × 10%) 3,00,000
Safeguard duty @ 30% on 30,00,000 [Safeguard duty is imposable in
the given case since share of imports of sodium nitrite from the
developing country is more than 3% of the total imports of sodium
nitrite into India (Proviso to section 8B(1) of the Customs Tariff Act, 9,00,000
1975)]
SWS @ 10% of (3,00,000 + 9,00,000) 1,20,000
Total 43,20,000
Integrated tax leviable under section 3(7) of Customs Tariff Act 5,18,400
(43,20,000 × 12%)
Total customs duty payable
18,38,400
(3,00,000 + 9,00,000 + 1,20,000 + 5,18,400)
PROHIBITIONS ON IMPORTATION & EXPORTATION [SEC

11]
Power to prohibit importation or exportation of goods. -
The Central Government may by notification in the Official Gazette, prohibit either absolutely
or subject to such conditions as may be specified, the import or export of goods of any
specified description for any of the following purposes-
(a) the maintenance of the security of India;

(b) the maintenance of public order and standards of decency or morality;
(c) the prevention of smuggling;
(d) the prevention of shortage of goods of any description;
(e) the conservation of foreign exchange and the safeguarding of balance of payments;
(f) the prevention of injury to the economy of the country by the uncontrolled import or
export of gold or silver;
(g) the prevention of surplus of any agricultural product or the product of fisheries;
(h) the maintenance of standards for the classification, grading or marketing of goods in
international trade;
(i) the establishment of any industry;
(j) the prevention of serious injury to domestic production of goods of any description;
(k) the protection of human, animal or plant life or health;
(l) the protection of national treasures of artistic, historic or archaeological value;
(m) the conservation of exhaustible natural resources;
(n) the protection of patents, trademarks, copyrights, designs and geographical
indications;
(o) the prevention of deceptive practices;
(p) the carrying on of foreign trade in any goods by the State, or by a Corporation owned
or controlled by the State to the exclusion, complete or partial, of citizens of India;
(q) the fulfillment of obligations under the Charter of the United Nations for the
maintenance of international peace and security;
(r) the implementation of any treaty, agreement or convention with any country;
(s) the compliance of imported goods with any laws which are applicable to similar goods
produced or manufactured in India;
(t) the prevention of dissemination of documents containing any matter which is likely
to prejudicially affect friendly relations with any foreign State or is derogatory to
national prestige;
(u) the prevention of the contravention of any law for the time being in force; and
(v) any other purpose conducive to the interests of the general public.
Any prohibition or restriction or obligation relating to import or export of any goods or class of
goods or clearance thereof provided in any other law for the time being in force, or any rule or
regulation made or any order or notification issued thereunder, shall be executed under the
provisions of that Act only if such prohibition or restriction or obligation is notified under the
provisions of this Act, subject to such exceptions, modifications or adaptations as the Central
Government deems fit.
Sec.17: Assessment of Duty.
Self-Assessment: An importer entering any imported goods u/s 46, or an exporter entering
any export goods u/s 50, shall, self-assess the duty, if any, leviable on such goods.
Exception: Stores allowed to be warehoused without assessment of duty u/s section 85
Verification of self-assessment by Proper officer:
(i) The proper officer may verify the entries made u/s 46 or 50 and the self-assessment of
such goods and for this purpose, examine or test any imported or export goods or such
part thereof as may be necessary. Provided that the selection of cases for verification
shall primarily be on the basis of risk evaluation through appropriate selection criteria
(ii) For the purpose of verification of self-assessment, the proper officer may require the
importer, exporter or any other person to produce any document or information,
whereby the duty leviable on the imported goods or export goods, as the case may be,
can be ascertained and thereupon, the importer, exporter or such other person shall
produce such document or furnish such information.
Re-Assessment by Proper Officer
(i) Where it is found on verification, examination or testing of the goods or otherwise that
the self-assessment is not done correctly, the proper officer may re-assess the duty
leviable on such goods. In addition, he is free to take any other action which may be taken
under this Act
(ii) Where any re-assessment done is contrary to the self-assessment done by the importer
or exporter, where the importer or exporter does not confirm the said re-assessment in
writing, the proper officer shall pass a speaking order on the re-assessment, within15
days from the date of re-assessment of the bill of entry or the shipping bill, as the case
maybe.
Sec 18. Provisional Assessment of Duty
Purpose of making provisional assessment.
The proper officer may assess the duty provisionally in the following cases-
(a) where the importer or exporter is unable to make self-assessment u/s 17 and makes a
request in writing to the proper officer for assessment; or
(b) where the proper officer deems it necessary to subject any imported goods or export
goods to any chemical or other test; or
(c) where the importer or exporter has produced all the necessary documents and
furnished full information but the proper officer deems it necessary to make further
enquiry; or
(d) where necessary documents have not been produced or information has not been
furnished and the proper officer deems it necessary to make further enquiry
Payment &Bond
(1) the importer shall file bill of entry for such imported goods u/s 46.
(2) the importer or the exporter, shall pay the duty so assessed and furnish such security as
the proper officer deems fit for the payment of the deficiency, if any, between the duty
as may be finally assessed and the duty provisionally assessed
(3) In the case of warehoused goods, the importer shall execute a bond = thrice the amount
of duty provisionally assessed.
Final assessment, or re-assessment
(1) if any document or information is required by the proper officer for final assessment, the
importer or exporter, as the case may be, shall submit such document or information
within such time, and the proper officer shall finalise the provisional assessment within
such time and in such manner, as may be prescribed.
(2) in the case of goods cleared for home consumption or exportation, the amount paid shall
be adjusted against the duty finally assessed or re-assessed and the shortfall or excess
shall be paid or refunded, as the case may be;
(3) In the case of warehoused goods, where the duty finally assessed or re-assessed is in
excess of the duty provisionally assessed, the importer shall execute a bond, twice the
amount of the excess duty.
Interest
(1) In case of excess duty: @15% pa from the 1st day of the month in which the duty is
provisionally assessed till the date of payment there.
(2) In case of refund: @ 6%pa after 3 months from the date of assessment till the date of
refund of such amount
Refund and interest
The amount of duty refundable and interest, shall instead of being credited to the Fund, be
paid to the importer or the exporter, in the following cases–
(a) if he had not passed on the incidence of such duty and interest to any other person;
(b) imports made by an individual for his personal use;
(c) if the buyer has not passed on the incidence of such duty and interest, to any other
person;
(d) the export duty as specified in section 26;
(e) Drawback of duty payable under sections 74 and 75.
Voluntary Payment before Final assessment
Circular No.40 / 2011 – Customs:
(a) Such duty should be paid along with interest @15% from the first day of the month in
which the duty is provisionally assessed till the date of payment thereof;
(b) The term and conditions of the bond and the amount of security furnished at the time
of provisional assessment shall remain unchanged; and
(c) No refund of duty will be granted till the assessment is finalised.
The importer or exporter in such case shall not incur interest on the amount of duty so paid
for the period from the date of such payment till the finalization of assessment.
The amount of duty provisionally paid or paid in the interim period and interest paid, if any,
shall be adjusted against the duty finally assessed, and the interest payable.
Circular No. 38/2016 Cus dated 22.08.2016:
Wherever, duty is to be assessed provisionally, the importer shall:
(a) execute a bond in the prescribed form, for the purposes of undertaking to pay on
demand the deficiency, if any, between the duty as may be finally assessed and
the duty provisionally assessed; and
(b) furnish prescribed amount of security for the payment of the duty deficiency. No
sureties shall be obtained. The security to be obtained shall be in the form of a
bank guarantee or a cash deposit, as convenient to the importer.
99A. AUDIT.
The proper officer may carry out the audit of assessment of imported goods or export goods or
of an auditee under this Act either in his office or in the premises of the auditee in such manner
as may be prescribed.
Explanation.—For the purposes of this section, “auditee” means a person who is subject to an
audit under this section and includes an importer or exporter or custodian approved under
section 45 or licensee of a warehouse and any other person concerned directly or indirectly in
clearing, forwarding, stocking, carrying, selling or purchasing of imported goods or export goods
or dutiable goods.’.
IMPORT PROCEDURE
Sec 30: Delivery of Arrival Manifest or Import Manifest or Import Report. –

(1) The person-in-charge of -
(i) a vessel; or
(ii) an aircraft; or
(iii) a vehicle,
carrying imported goods or export goods or any other person as may be specified by the
Central Government, shall
➢ in the case of a vessel or an aircraft, deliver to the proper officer an arrival

manifest or import manifest by presenting electronically prior to the arrival of
the vessel or the aircraft, and
➢ in the case of a vehicle, an import report within 12 hours after its arrival in the
customs station.
The arrival manifest or import manifest/ report shall be in the prescribed form and manner
Penalty for Delay: if the proper officer is satisfied that there was no sufficient cause for the
delay, the person-in-charge or other specified person who caused such delay, shall be liable to
a penalty not exceeding Rs. 50,000/-
Provided that the PCC or CC may, in cases where it is not feasible to deliver arrival manifest or
import manifest by presenting electronically, allow the same to be delivered in any other
manner.
(2) The person delivering the arrival manifest or import manifest or import report shall at the
foot thereof make and subscribe to a declaration as to the truth of its contents.
(3) If the proper officer is satisfied that the arrival manifest or import manifest or import report
is in any way incorrect or incomplete, and that there was no fraudulent intention, he may permit
it to be amended or supplemented.
The rules of submission of Arrival Manifest or Import Manifest / Report are as under –
Conveyance Place of calling Document Time limit
Vessel Customs Port Arrival Manifest

or Import Prior to arrival
Aircraft Custom Airport Manifest
Within 12 hours after

Vehicle Land Custom Station Import Report
arrival
Sec 46: Bill of Entry of goods. –

The importer of any goods other than goods intended for transit / transshipment shall make
entry thereof by presenting electronically on the customs automated system to the proper
officer a bill of entry for home consumption or warehousing in such form and manner as may
be prescribed.
Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in

cases where it is not feasible to make entry by presenting electronically on the customs
automated system, allow an entry to be presented in any other manner:
There are 3 types of Bills of Entries

Form I (White) – for home consumption.
Form II (Yellow) – for warehousing (into bond).
Form III (Green) – for ex-bond clearance for home consumption.
The Bill of Entry should be presented, in quadruplicate as follows:
➢ Original, meant for the customs authorities for assessment and collection of
duty;
➢ Duplicate, intended as an authority to the custodian of the cargo to release
cargo to the importer from his custody;
➢ Triplicate, as a copy for record for the importer; and
➢ Quadruplicate, as a copy to be presented to the bank or Reserve Bank of India
for the purposes of making remittance for the imported goods.
A bill of entry shall include all the goods mentioned in the bill of lading or other receipt given
by the carrier to the consignor
Time for filing Bill of Entry:

Normal Bill: The importer shall present the bill of entry before the end of the next day
following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the
goods arrives at a customs station at which such goods are to be cleared for home
consumption or warehousing:
Late filing Fee: Provided that where the bill of entry is not presented within the time so
specified and the proper officer is satisfied that there was no sufficient cause for such delay,
the importer shall pay such charges for late presentation of the bill of entry as may be
prescribed
Advance Bill: A bill of entry may be presented at any time not exceeding 30 days prior to the
expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for
importation into India.
However, if the vessel or aircraft or vehicle does not arrive within 30 days, then it shall
become void, and the importer is then required to present a fresh bill of entry for the same
goods.
Verification: The importer shall make and subscribe to a declaration as to the truth of the
contents of such bill of entry and shall, in support of such declaration, produce to the proper
officer the invoice, if any, relating to the imported goods
Additional requirements: The importer who presents a bill of entry shall ensure the following,
namely: —
(a) the accuracy and completeness of the information given therein;
(b) the authenticity and validity of any document supporting it; and
(c) compliance with the restriction or prohibition, if any, relating to the goods under this Act
or under any other law for the time being in force.
Examination of goods / Deposit in Warehouse:

On a request made by the importer, for want of full information required for making
assessment, the proper officer may, permit him, prior to filing bill of entry -
(a) to examine the goods in the presence of an officer of customs, or

(b) to deposit the goods in a public warehouse without warehousing the same.
Substitution of Bill: If the proper officer is satisfied that the interests of revenue are not
prejudicially affected and that there was no fraudulent intention, he may permit substitution
of a bill of entry for home consumption for a bill of entry for warehousing or vice versa.
Bill of Entry (Electronic Integrated Declaration and Paperless Processing)

Regulations, 2018.
Notification No. 36 /2018-Customs (N.T.) 11th May 2018
1. Short title, extent and commencement. –
(1) These regulations may be called the Bill of Entry (Electronic Integrated Declaration and
Paperless Processing) Regulations, 2018.
(2) They shall apply to the import of goods through all customs stations where the Indian
Customs Electronic Data Interchange System is in operation.
(3) They shall come into force on the date of their publication in the Official Gazette.
2. Definitions. -
(1) In these regulations, unless the context otherwise requires, -
(a) "Act" means the Customs Act, 1962 (52 of 1962);
(b) "authorised person" means an importer or a person authorised by him who has a valid
licence under the Customs Brokers Licensing Regulations, 2013 or any other regulation
dealing with the similar matters and it also includes an employee of the Customs broker who
has been issued a photo identity card in Form G under the Customs Brokers Licensing
Regulations, 2013 or any other regulation dealing with the similar matters;
(c) "bill of entry" means electronic integrated declaration accepted and a unique number
generated and assigned to that particular bill of entry by the Indian Customs Electronic Data
Interchange System, and includes its electronic records or print-outs;
Explanation. - For the purposes of this clause, the electronic record shall have the meaning
assigned to it as in the Information Technology Act, 2000;
(d) "electronic integrated declaration" means particulars relating to the imported goods that
are entered in the Indian Customs Electronic Data Interchange System;
(e) "ICEGATE" means the customs automated system of Central Board of Indirect Taxes and
Customs;
(f) "service center" means the place specified by the Principal Commissioner or the
Commissioner of Customs, as the case may be, where the data entry of an electronic
integrated declaration, is carried out;
(g) "supporting documents" means the documents in the electronic form or otherwise, which
are relevant to the assessment of the imported goods under sections 17 and 46 of the Act.
(2) The words and expressions used and not defined herein but defined in the Customs Act,
1962 shall have the same meaning as assigned to them in the said Act.
3. The authorised person shall enter the electronic integrated declaration and the supporting
documents himself by affixing his digital signature and enter them on the Customs Automated
System and he may also get the electronic integrated declaration made on the customs
automated system along with the supporting documents by availing the services at the service
centre.
Explanation. - For the purposes of this regulation, the words "digital signature" shall have the
meaning assigned to it in the Information Technology Act, 2000;
4. (1) The authorised person shall file the bill of entry before the end of the next day following
the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods
arrives at a customs station at which such goods are to be cleared for home consumption or
warehousing.
(2) The bill of entry shall be deemed to have been filed and self-assessment completed when
after entry of the electronic integrated declaration on the customs automated system or by
way of data entry through the service Centre, a bill of entry number is generated by the Indian
Customs Electronic Data Interchange System for the said declaration and the self-assessed
copy of the Bill of Entry may be electronically transmitted to the authorised person or printed
out at the service Centre.
(3) Where the bill of entry is not filed within the time specified in sub-regulation (1) and the
proper officer of Customs is satisfied that there was no sufficient cause for such delay, the
importer shall be liable to pay charges for late presentation of the bill of entry at the rate of
rupees five thousand per day for the initial three days of default and at the rate of rupees ten
thousand per day for each day of default thereafter:
Provided that where the proper officer is satisfied with the reasons of delay, he may
waive off the charges referred to in the second proviso to sub-section (3) of section 46 of the
Customs Act, 1962.
(4) The late presentation charges referred to in sub-regulation (3) above in respect of any bill
of entry shall not exceed the duty payable in respect of that particular bill of entry.
Provided that where the duty or any other charges in respect of any bill of entry are not
payable for any reason like exemption or otherwise, the late presentation charges shall not
exceed fifty thousand rupees.
5. After the completion of the assessment, an order permitting clearance under subsection
(1) of section 47or section 68, as the case may be, shall be made, after examination of the
imported goods if so required and the order under regulation 5 may be recorded on the
customs automated system and conveyed electronically to the authorised person, the
custodian, and to any other person (s) designated by the authorised person.
6. The authorised person shall retain, for a period of 5 years from the date of presentation of
the bill of entry, the assessed copy of the bill of entry, digital or otherwise, and all supporting
documents in original, which were used or relied upon by him in submitting the electronic
integrated declaration, and shall produce them before Customs in connection with any action
or proceedings under the Act or under any other law for the time being in force.
7. An authenticated copy of bill of entry may be generated at the request of the authorised
person if possession of the said copy is required by him for compliance of provisions of law
for the time being in force.
8. Any authorised person who contravenes any provision of these regulations or who fails to
comply with any provisions of these regulations shall be liable to a penalty which may extend
to fifty thousand rupees
Sec 47: Payment of Customs Duty & Clearance of goods for home consumption
(1) Where the proper officer is satisfied that
➢ any goods entered for home consumption are not prohibited goods and
➢ the importer has paid the import duty, if any, assessed thereon and
➢ any charges payable under this Act in respect of the same,
the proper officer may make an order permitting clearance of the goods for home
consumption:
Provided that such order may also be made electronically through the customs
automated system on the basis of risk evaluation through appropriate selection criteria:
Provided further that the Central Government may, by notification in the Official
Gazette, permit certain class of importers to make deferred payment of said duty or any
charges in such manner as may be provided by rules.
(2) The importer shall pay the import duty-
(a) on the date of presentation of the bill of entry in the case of self-assessment; or
(b) within one day (excluding holidays) from the date on which the bill of entry is returned
to him by the proper officer for payment of duty in the case of assessment,
reassessment or provisional assessment; or
(c) in the case of deferred payment, from such due date as may be specified by rules made
in this behalf,
and if he fails to pay the duty within the time so specified, he shall pay interest on the duty
not paid or short-paid till the date of its payment, at such rate, not less than 10% but not
exceeding 36% per annum, as may be fixed by the Central Government, by notification in the
Official Gazette.
Interest is payable @15% pa
Provided that the Central Government may, by notification in the Official Gazette, specify the
class or classes of importers who shall pay such duty electronically
Provided also that if the Board is satisfied that it is necessary in the public interest so to do, it
may, by order for reasons to be recorded, waive the whole or part of any interest payable
under this section.
Compulsory ECS payment: The Central Government has specified the following classes of
importers who shall pay customs duty electronically, namely: -
(i) Importers registered under Accredited Clients Program, or
(ii) Importers paying customs duty of Rs. 1 lakh or more per bill of entry.
On making this order, which is popularly known as “pass out of customs charge
order” the duplicate copy of bill of entry is produced to the custodian who delivers the
goods to the importer.
Some major importers have been given the green channel clearance facility. It
means clearance of goods is done without routine examination of the goods. They
have to make a declaration in the declaration form at the time of filing of bill of entry.
The appraisement is done as per normal procedure except that there would be no
physical examination of the goods. Only marks and number are to be checked in
such cases. However, in rare cases, if there are specific doubts regarding description
or quantity of the goods, physical examination may be ordered by the senior
officers/investigation wing.
SECTION 51A. Payment of duty, interest, penalty, etc.-

(1) Every deposit made towards duty, interest, penalty, fee or any other sum payable by a
person under the provisions of this Act or under the Customs Tariff Act, 1975 or under any
other law for the time being in force or the rules and regulations made thereunder, using
authorised mode of payment shall, subject to such conditions and restrictions, be credited to
the electronic cash ledger of such person, to be maintained in such manner, as may be
prescribed.
(2) The amount available in the electronic cash ledger may be used for making any payment
towards duty, interest, penalty, fees or any other sum payable under the provisions of this
Act or under the Customs Tariff Act, 1975 or under any other law for the time being in force
or the rules and regulations made thereunder in such manner and subject to such conditions
and within such time as may be prescribed.
(3) The balance in the electronic cash ledger, after payment of duty, interest, penalty, fee or
any other amount payable, may be refunded in such manner as may be prescribed.
(4) Notwithstanding anything contained in this section, if the Board is satisfied that it is
necessary or expedient so to do, it may, by notification, exempt the deposits made by such
class of persons or with respect to such categories of goods, as may be specified in the
notification, from all or any of the provisions of this section.
EXPORT PROCEDURE
CLEARANCE OF EXPORT GOODS
Sec 50: Entry of goods for exportation. –

The exporter of any goods shall present to the proper officer in the case of
➢ goods to be exported in a vessel or aircraft-a shipping bill.

➢ goods to be exported by land-a bill of export.
The exporter, shall make and subscribe to a declaration as to the truth of its contents.
The shipping bill or bill of export must be presented electronically on the customs automated
system form. However, the commissioner of customs may allow it to be filed otherwise in
cases where it is not feasible to present electronically
The exporter who presents a shipping bill or bill of export under this section shall ensure the
following, namely: —
(a) the accuracy and completeness of the information given therein;

(b) the authenticity and validity of any document supporting it; and
(c) compliance with the restriction or prohibition, if any, relating to the goods
under this Act or under any other law for the time being in force.
Shipping bill should be submitted in quadruplicate. If drawback claim is to be made, then 5

copies
Types of Shipping Bill
(i). for export of goods under claim for duty drawback - Green color
(ii). for export of dutiable goods -Yellow color
(iii). for export of duty free goods -White color
(iv). for export of duty free goods ex-bond - i.e. from bonded store room - Pink color
(v). For export incentives - Blue color.
Sec 51: Let Export Order
Where the proper officer is satisfied that any goods entered for export are not prohibited
goods and the exporter has paid the duty, if any, assessed thereon and any charges payable
under this Act in respect of the same, he may make an order permitting clearance and loading
of the goods for exportation.
Provided that such order may also be made electronically through the customs automated
system on the basis of risk evaluation through appropriate selection criteria
Provided further that the Central Government may, by notification in the Official Gazette,
permit certain class of exporters to make deferred payment of said duty or any charges in
such manner as may be provided by rules.
In case of deferred payment of duty, where the exporter fails to pay the export duty, either
in full or in part, by such due date as may be specified by rules, he will have to pay interest on
said duty not paid or short-paid till the date of its payment. The Central Government will
notify the rate of interest within a range of 5% p.a. to 36% p.a.
SEC 51A. Payment of duty, interest, penalty, etc.-

(1) Every deposit made towards duty, interest, penalty, fee or any other sum payable by a
person under the provisions of this Act or under the Customs Tariff Act, 1975 or under any
other law for the time being in force or the rules and regulations made thereunder, using
authorised mode of payment shall, subject to such conditions and restrictions, be credited to
the electronic cash ledger of such person, to be maintained in such manner, as may be
prescribed.
(2) The amount available in the electronic cash ledger may be used for making any payment
towards duty, interest, penalty, fees or any other sum payable under the provisions of this
Act or under the Customs Tariff Act, 1975 or under any other law for the time being in force
or the rules and regulations made thereunder in such manner and subject to such conditions
and within such time as may be prescribed.
(3) The balance in the electronic cash ledger, after payment of duty, interest, penalty, fee or
any other amount payable, may be refunded in such manner as may be prescribed.
(4) Notwithstanding anything contained in this section, if the Board is satisfied that it is
necessary or expedient so to do, it may, by notification, exempt the deposits made by such
class of persons or with respect to such categories of goods, as may be specified in the
notification, from all or any of the provisions of this section.
Sec 39: Entry Outward

➢ The vessel should be granted ‘Entry Outward’.
➢ Loading can start only after entry outward is granted.
➢ Loading should be done with permission of proper officer
Sec 40: Let Ship Order

Export goods can be loaded only after Shipping Bill or Bill of Export, duly passed is handed over
by Exporter to the person-in-charge of conveyance.
In case of baggage and mailbags, shipping bill is not necessary, but permission of Customs
Officer is required.
Sec 41: Departure Manifest or Export Manifest or Export Report.

The person-in-charge of a conveyance carrying export goods or imported goods shall, before
departure of the conveyance from a customs station, deliver to the proper officer
➢ in the case of a vessel or aircraft, a departure manifest or export manifest by

presenting electronically, and
➢ in the case of a vehicle, an export report
The departure manifest or export manifest/ report shall be submitted in the prescribed form
and manner
Penalty for Delay: if the proper officer is satisfied that there was no sufficient cause for the
delay, the person-in-charge or other specified person who caused such delay, shall be liable to
a penalty not exceeding Rs. 50,000/-
Provided that the Commissioner of Customs may, in cases where it is not feasible to deliver
the export manifest by presenting electronically, allow the same to be delivered in any other
manner.
The person, shall at the foot of export manifest or report, make and subscribe to a declaration
as to the truth of its contents.
If the proper officer is satisfied that the export manifest or export report is in any way
incorrect or incomplete and that there was no fraudulent intention, he may permit such
manifest or report to be amended or supplemented.
Preparation of EGM/ER: The procedure for preparation of EGM/ER is as follows:

i. In the case of shipment by sea, the ship’s officer gives a receipt after he has
received the consignment on board the ship. This receipt is called mate receipt. It
is surrendered to the steamer agent or the agent who issues the bill of lading.
ii. In the case of shipment by air, after the cargo is delivered to the airways for
loading, the airways issue an air consignment note.
iii. In the case of train and lorry a railway receipt or a lorry receipt as the case may
be is issued as soon as the consignment is received by the carrier.
The export general manifest or report is the consolidated report of all such Bills of
Lading / air consignment notes / railway receipts / lorry receipts issued.
Form & Content of Export General Manifest or Export Report: The form of the
export general manifest/export report is prescribed under the following:
a) The Export Manifest (Vessel) Regulations, 1976
b) The Export Manifest (Aircraft) Regulations, 1976
c) The Export Manifest (Form) Regulations, 1975
In all the three regulations the common features are as follows:

1) The manifest/report shall be delivered in duplicate.
2) It shall consist of
a) Cargo report
b) Vessel’s store list,
c) Private property list of master, officers and crew
d) In case the vessel/aircraft/conveyance carries passengers, a passenger
manifest.
3) The cargo list shall give the following details in separate sheets.
a. Cargo shipped
b. Cargo transhipped,
c. Cargo lying in the vessel/aircraft, but not landed or transhipped (same
bottom cargo)
d. Cargo in respect of which drawback is claimed.
e. In case of the vessel, the dutiable goods, including arms and ammunition
forming part of the ordinary equipment of a vessel.
4) Specific declaration should be made in respect of the following cargo,

irrespective of whether it comprises same bottom cargo, shipment or
transhipment
i. arms
ii. ammunition
iii. explosives
iv. narcotics
v. dangerous drugs or
vi. gold
If the vessel/aircraft does not carry any such cargo, a nil report should be
furnished.
41A. Passenger and crew departure manifest and passenger name record
information.
(1) The person-in-charge of a conveyance that departs from India to a place outside
India or any other person as may be specified by the Central Government by
notification in the Official Gazette, shall deliver to the proper officer—
(i) the passenger and crew departure manifest; and
(ii) the passenger name record information of departing passengers,
in such form, containing such particulars, in such manner and within such time, as may
be prescribed.
(2) Where the passenger and crew departure manifest or the passenger name record
information or any part thereof is not delivered to the proper officer within thep
rescribed time and if the proper officer is satisfied that there was no sufficient cause
for such delay, the person-in-charge or the other person referred to in sub-section (1)
shall be liable to such penalty, not exceeding 50,000 rupees, as may be prescribed
WAREHOUSING
Sec 60: Permission for deposit of goods in a warehouse. –
(1) When the provisions of section 59 have been complied with in respect of any goods, the
proper officer may make an order permitting removal of the goods from a customs
station for the purpose of deposit in a warehouse.
Provided that such order may also be made electronically through the customs
automated system on the basis of risk evaluation through appropriate selection criteria.
(2) Where an order is made under sub-section (1), the goods shall be deposited in a
warehouse in such manner as may be prescribed
Sec 68: Clearance of warehoused goods for home consumption. –

Any warehoused goods may be cleared from the warehouse, if -
(a) a bill of entry for home consumption has been presented in the prescribed form;
(b) the import duty, interest, fine and penalties payable in respect of such goods have been
paid; and
(c) an order for clearance of such goods for home consumption has been made by the proper
officer.
Provided that the order referred to in clause (c) may also be made electronically through the
customs automated system on the basis of risk evaluation through appropriate selection
criteria:
Relinquishment of Title: the owner may, at any time before an order for clearance of goods
for whom consumption has been made, relinquish his title to the goods upon payment of
penalties that may be payable in respect of the goods and upon such relinquishment, he shall
not be liable to pay duty thereon.
Provided also that the owner of any such warehoused goods shall not be allowed to relinquish
his title to such goods regarding which an offence appears to have been committed under
this Act or any other law for the time being in force
Sec 69: Clearance of warehoused goods for export –

Any warehoused goods may be exported to a place outside India without payment of import
duty if -
(a) a shipping bill or a bill of export in the prescribed form u/s 84 (in case of postal
exports) has been presented in respect of such goods;
(b) the export duty, fine and penalties payable in respect of such goods have been paid;
and
(c) an order for clearance of such goods for export has been made by the proper officer.
Provided that the order referred to in clause (c) may also be made electronically
through the customs automated system on the basis of risk evaluation through
appropriate selection criteria:
if the Central Government is of opinion that warehoused goods of any specified description
are likely to be smuggled back into India, it may, by notification in the Official Gazette, direct
that such goods shall not be exported to any place outside India without payment of duty or
may be allowed to be so exported subject to such restrictions and conditions as may be
specified in the notification.
DRAWBACK OF DUTY
Sec74: Drawback on re-export of duty-paid goods
Drawback is allowed @ 98 % of import duty paid on such goods, when they are entered for
export –
(i) As cargo - and the proper officer makes an order permitting clearance and loading
of the goods u/s 51; or
(ii) As baggage- and the owner makes a declaration of its contents u/s 77 and proper
officer makes an order permitting clearance of the goods; or
(iii) as postal goods - under section 84(a) and the proper officer makes an order
permitting clearance of the goods,
Conditions:
(a) The goods are identified to the satisfaction of the AC or DC as the goods which were
imported; and
(b) The goods are entered for export within 2 years from the date of payment of duty on
the importation thereof. Extension may be granted by the Board by such further period
as it may deem fit.
In the case of goods assessed to duty provisionally u/s 18, the date of payment of the
provisional duty shall be deemed to be the date of payment of duty
Export of goods after use:
(1) In case of imported goods which are used before export, drawback shall be allowed at
the rates notified by the Central Government, having regard to -
(i). the duration of use,
(ii). depreciation in value and
(iii). other relevant circumstances.
The notified rates are as under-
Period of use in India Duty Drawback

<= 3 months 95%
>3 months, <= 6 months 85%
>18 months, NIL
No drawback on following goods which are used after their importation:

(i). Wearing apparel
(ii). Tea chests
(iii). Exposed cinematographic film passed by the Board of Film Censors in
India.
(iv). Unexposed photographic films, paper and plates and X-Ray films.
(2) In case of motor car or goods imported by a person for his personal and private use,
drawback of duty shall be calculated by reducing the import duty by-
i. use during 1st year – 4% per quarter
ii. use during 2nd year – 3% per quarter
iii. use during 3rd year – 2.5% per quarter
iv. use during 4th year – 2%per quarter
For exportation after 24 months, extension of period must be obtained from
CBEC.
No drawback will be allowed if exportation is after 4 years.
Sec 75: Drawback on imported materials used in the manufacture of exported

good
Where it appears to the Central Government that

• in respect of goods of any class or description manufactured, processed or on
which any operation has been carried out in India,
• being goods, which have been entered for export and in respect of which an
order permitting the clearance and loading thereof for exportation has been
made under section 51 by the proper officer, or
• being goods entered for export by post under clause (a) of section 84 and in
respect of which an order permitting clearance for exportation has been made
by the proper officer,
a drawback should be allowed of duties of customs chargeable under this Act on any
imported materials of a class or description used in the manufacture or processing of
such goods or carrying out any operation on such goods,
the Central Government may, by notification in the Official Gazette, direct that
drawback shall be allowed in respect of such goods in accordance with, and subject
to, the rules made:
No drawback shall be allowed in respect of any goods, if

(a) the export value of such goods or class of goods is less than the value of the
imported materials used in the manufacture or processing of such goods, or
(b) is not more than such specified percentage of the value of the imported
materials used in the manufacture or processing of such goods, or
(c) the sale proceeds in respect of such goods are not received by or on behalf of
the exporter in India within the time allowed under the FEMA, 1999. If drawback
is already allowed, it shall be recovered.
POSTAL IMPORT
Sec 83: Rate of duty and tariff valuation in respect of goods imported or
exported by post or courier. –
(1) The rate of duty and tariff value, if any, applicable to any goods imported by post or
courier shall be the rate and valuation in force on the date on which the postal authorities
or the authorized courier present to the proper officer a list containing the particulars of
such goods for the purpose of assessing the duty thereon:
Provided that if such goods are imported by a vessel and the list of the goods containing
the particulars was presented before the date of the arrival of the vessel, it shall be
deemed to have been presented on the date of such arrival.
(2) The rate of duty and tariff value, if any, applicable to any goods exported by post shall be
the rate and valuation in force on the date on which the exporter delivers such goods to
the postal authorities or the authorized courier for exportation.
Sec 84: Regulations regarding goods imported or to be exported by post or

courier. –
The Board may make regulations providing for -
(a) the form and manner in which an entry may be made in respect of goods imported or to
be exported by post or courier;
(b) the examination, assessment to duty, and clearance of goods imported or to be exported
by post or courier;
(c) the transit or transshipment of goods imported by post or courier, from one customs
station to another or to a place outside India.
EXEMPTIONS:
SECTION 25A. Inward processing of goods. -

Where the Central Government is satisfied that it is necessary in the public interest so to do,
it may, by notification, exempt such of the goods which are imported for the purposes of
repair, further processing or manufacture, as may be specified therein, from the whole or any
part of duty of customs leviable thereon, subject to the following conditions, namely:—
(a) the goods shall be re-exported after such repair, further processing or manufacture, as the
case may be, within a period of 1 year from the date on which the order for clearance of
the imported goods is made;
(b) the imported goods are identifiable in the export goods; and
(c) such other conditions as may be specified in that notification.
SECTION 25B. Outward processing of goods. - .

Notwithstanding anything contained in section 20, where the Central Government is satisfied
that it is necessary in the public interest so to do, it may, by notification, exempt such of the
goods which are re-imported after being exported for the purposes of repair, further
processing or manufacture, as may be specified therein, from the whole or any part of duty
of customs leviable thereon, subject to the following conditions, namely: —
(a) the goods shall be re-imported into India after such repair, further processing or
manufacture, as the case may be, within a period of 1 year from the date on which the
order permitting clearance for export is made;
(b) the exported goods are identifiable in the re-imported goods; and
(c) such other conditions as may be specified in that notification.
SECTION 28. Recovery of duties not levied or not paid or short-levied or short-
paid or erroneously refunded. –
(1) Where any duty has not been levied or not paid or short-levied or short-paid or
erroneously refunded, or any interest payable has not been paid, part-paid or erroneously
refunded, for any reason other than the reasons of collusion or any wilful mis-statement or
suppression of facts, -
(a) the proper officer shall, within 2 years from the relevant date, serve notice on the person
chargeable with the duty or interest which has not been so levied or paid or which has
been short-levied or short-paid or to whom the refund has erroneously been made,
requiring him to show cause why he should not pay the amount specified in the notice;
Provided that before issuing notice, the proper officer shall hold pre-notice consultation
with the person chargeable with duty or interest in such manner as may be prescribed;
(b) the person chargeable with the duty or interest, may pay before service of notice under
clause (a) on the basis of, -
(i) his own ascertainment of such duty; or
(ii) the duty ascertained by the proper officer,
the amount of duty along with the interest payable thereon under section 28AA or the
amount of interest which has not been so paid or part-paid.
Provided that the proper officer shall not serve such show cause notice, where the amount
involved is < Rs. 100/-.
(2) The person who has paid the duty along with interest or amount of interest under clause
(b) of sub-section (1) shall inform the proper officer of such payment in writing, who, on
receipt of such information, shall not serve any notice under clause (a) of that sub-section in
respect of the duty or interest so paid or any penalty leviable under the provisions of this Act
or the rules made thereunder in respect of such duty or interest:
Provided that where notice under clause (a) of sub-section (1) has been served and the proper
officer is of the opinion that the amount of duty along with interest payable thereon under
section 28AA or the amount of interest, as the case may be, as specified in the notice, has
been paid in full within 30 days from the date of receipt of the notice, no penalty shall be
levied and the proceedings against such person or other persons to whom the said notice is
served under clause (a) of sub-section (1) shall be deemed to be concluded.
(3) Where the proper officer is of the opinion that the amount paid under clause (b) of sub-
section (1) falls short of the amount actually payable, then, he shall proceed to issue the
notice as provided for in clause (a) of that sub-section in respect of such amount which falls
short of the amount actually payable in the manner specified under that sub-section and the
period of 2 years shall be computed from the date of receipt of information under sub-section
(2).
(4) Where any duty has not been levied or not paid or has been short-levied or short-paid
or erroneously refunded, or interest payable has not been paid, part-paid or erroneously
refunded, by reason of, -
(a) collusion; or
(b) any wilful mis-statement; or
(c) suppression of facts,
by the importer or the exporter or the agent or employee of the importer or exporter, the
proper officer shall, within 5 years from the relevant date, serve notice on the person
chargeable with duty or interest which has not been so levied or not paid or which has been
so short-levied or short-paid or to whom the refund has erroneously been made, requiring
him to show cause why he should not pay the amount specified in the notice.
(5) Where any duty has not been levied or not paid or has been short-levied or short paid] or
the interest has not been charged or has been part-paid or the duty or interest has been
erroneously refunded by reason of collusion or any wilful mis-statement or suppression of
facts by the importer or the exporter or the agent or the employee of the importer or the
exporter, to whom a notice has been served under sub- section (4) by the proper officer, such
person may pay the duty in full or in part, as may be accepted by him, and the interest payable
thereon under section 28AA and the penalty equal to 15% of the duty specified in the notice
or the duty so accepted by that person, within thirty days of the receipt of the notice and
inform the proper officer of such payment in writing.
(6) Where the importer or the exporter or the agent or the employee of the importer or the
exporter, as the case may be, has paid duty with interest and penalty under sub-section (5),
the proper officer shall determine the amount of duty or interest and on determination, if the
proper officer is of the opinion-
(i) that the duty with interest and penalty has been paid in full, then, the proceedings in
respect of such person or other persons to whom the notice is served under sub-
section (1) or sub- section (4), shall, without prejudice to the provisions of sections
135, 135A and 140 be deemed to be conclusive as to the matters stated therein; or
(ii) that the duty with interest and penalty that has been paid falls short of the amount
actually payable, then, the proper officer shall proceed to issue the notice as
provided for in clause (a) of sub-section (1) in respect of such amount which falls
short of the amount actually payable in the manner specified under that sub-section
and the period of two years shall be computed from the date of receipt of
information under sub-section (5).
(7) In computing the period of two years referred to in clause (a) of sub-section (1) or 5
years referred to in sub-section (4), the period during which there was any stay by an order
of a court or tribunal in respect of payment of such duty or interest shall be excluded.
(7A) Save as otherwise provided in clause (a) of sub-section (1) or in sub-section (4), the
proper officer may issue a supplementary notice under such circumstances and in such
manner as may be prescribed, and the provisions of this section shall apply to such
supplementary notice as if it was issued under the said sub section (1) or sub-section (4).
(8) The proper officer shall, after allowing the concerned person an opportunity of being
heard and after considering the representation, if any, made by such person, determine the
amount of duty or interest due from such person not being in excess of the amount specified
in the notice.
(9) The proper officer shall determine the amount of duty or interest under sub-section (8),
-
(a) within 6 months from the date of notice, in respect of cases falling under clause (a) of
sub- section (1);
(b) within 1 year from the date of notice, in respect of cases falling under sub-section (4).
Provided that where the proper officer fails to so determine within the specified period, any
officer senior in rank to the proper officer may, having regard to the circumstances under
which the proper officer was prevented from determining the amount of duty or interest
under sub-section (8), extend the period specified in clause (a) to a further period of 6 months
and the period specified in clause (b) to a further period of 1 year:
Provided further that where the proper officer fails to determine within such extended
period, such proceeding shall be deemed to have concluded as if no notice had been issued.
(9A) Notwithstanding anything contained in sub-section (9), where the proper officer is
unable to determine the amount of duty or interest under sub-section (8) for the reason
that—
(a) an appeal in a similar matter of the same person or any other person is pending before the
Appellate Tribunal or the High Court or the Supreme Court; or
(b) an interim order of stay has been issued by the Appellate Tribunal or the High Court or the
Supreme Court; or
(c) the Board has, in a similar matter, issued specific direction or order to keep such matter
pending; or
(d) the Settlement Commission has admitted an application made by the person concerned,
the proper officer shall inform the person concerned the reason for non-determination of the
amount of duty or interest under sub-section (8) and in such case, the time specified in sub-
section (9) shall apply not from the date of notice, but from the date when such reason ceases
to exist.
(10) Where an order determining the duty is passed by the proper officer under this section,
the person liable to pay the said duty shall pay the amount so determined along with the
interest due on such amount whether or not the amount of interest is specified separately.
(10A) Notwithstanding anything contained in this Act, where an order for refund under sub-
section (2) of section 27 is modified in any appeal and the amount of refund so determined is
less than the amount refunded under said sub-section, the excess amount so refunded shall
be recovered along with interest thereon at the rate fixed by the Central Government under
section 28AA, from the date of refund up to the date of recovery, as a sum due to the
Government.
(10B) A notice issued under sub-section (4) shall be deemed to have been issued under sub-
section (1), if such notice demanding duty is held not sustainable in any proceeding under this
Act, including at any stage of appeal, for the reason that the charges of collusion or any wilful
mis-statement or suppression of facts to evade duty has not been established against the
person to whom such notice was issued and the amount of duty and the interest thereon shall
be computed accordingly.
Explanation 1- For the purposes of this section, "relevant date" means,-

(a) in a case where duty is not levied or not paid or short-levied or short-paid, or interest is not
charged, the date on which the proper officer makes an order for the clearance of goods;
(b) in a case where duty is provisionally assessed under section 18, the date of adjustment of
duty after the final assessment thereof or re-assessment, as the case may be;
(c) in a case where duty or interest has been erroneously refunded, the date of refund;
(d) in any other case, the date of payment of duty or interest.
Explanation 3. – For the removal of doubts, it is hereby declared that the proceedings in
respect of any case of non-levy, short-levy, non-payment, short-payment or erroneous refund
where show cause notice has been issued under sub-section (1) or sub-section (4), as the case
may be, but an order determining duty under sub-section (8) has not been passed before the
date on which the Finance Bill, 2015 receives the assent of the President, shall, without
prejudice to the provisions of sections 135, 135A and 140, as may be applicable, be deemed
to be concluded, if the payment of duty, interest and penalty under the proviso to sub-section
(2) or under sub-section (5), as the case may be, is made in full within thirty days from the
date on which such assent is received.
THE PRE-NOTICE CONSULTATION REGULATIONS, 2018.

Notification No. 29 /2018- Customs (N.T.) 2 nd April, 2018
1. Short title and commencement. -

(1) These regulations may be called the Pre-notice Consultation Regulations, 2018.
(2) They shall come into effect on the date of their publication in the Official Gazette.
2. Definitions. - In these regulations, unless the context otherwise requires, -

(a) “Act” means the Customs Act, 1962 (52 of 1962);
(b) “consultation” means communication of the grounds known to the proper officer for
issuance of notice to the person chargeable with duty or interest in order to elicit the
response of the person and consideration of the representation of the said person;
(c) “notice” means a show cause notice referred to in sub-section (1) of section 28 of the Act.
3. Manner of conducting pre-notice consultation. -

Pre-notice consultation shall be made in the following manner: -
(1) Before the notice is issued, the proper officer shall inform, in writing, the person
chargeable with duty or interest of the intention to issue the notice specifying the grounds
known to the proper officer on which such notice is proposed to be issued and the process of
pre-notice consultation shall be initiated as far as possible at least 2 months before the expiry
of the time limit mentioned in sub-section (3) of section 28 of the Act.
(2) The person chargeable with duty or interest may, within 15 days from the date of
communication referred to in sub regulation (1), make his submissions in writing on the
grounds so communicated:
Provided that if no response is received, from the person to whom the grounds on which
notice is proposed to be issued, is received within the specified time, the proper officer shall
proceed to issue the notice to the said person without any further communication:
Provided further that while making the submissions, the person chargeable with duty or
interest shall clearly indicate whether he desires to be heard in person by the proper officer.
(3) The proper officer, may if requested, hear the person within 10 days of receipt of the
submissions referred to in sub-regulation (2) and subject to the provisions of section 28,
decide whether any notice is required to be issued or not:
Provided that no adjournment for any reason shall be granted in respect of the hearing
allowed under this regulation.
(4) Where the proper officer, after consultation, decides not to proceed with the notice with
reference to the grounds communicated under sub-regulation (1), he shall, by a simple letter,
intimate the same to the person concerned.
(5) The consultation process provided in these regulations shall be concluded within 60 days
from the date of communication of grounds as provided in sub-regulation (1).
(6) Where the proposed show cause notice is in respect of a person to whom a notice on the
same issue but for a different period or documents has been issued after pre-notice
consultation, the proper officer may proceed to issue the show cause notice for subsequent
periods without any further consultation.
ADVANCE RULING
SECTION 28E. Definitions. - In this Chapter, unless the context otherwise
requires, -
(a) activity means import or export and includes any new business of import or export
proposed to be undertaken by the existing importer or exporter, as the case may
be;
(b) "advance ruling" means a written decision on any of the questions referred to in
section 28H raised by the applicant in his application in respect of any goods prior
to its importation or exportation;
(ba) “Appellate Authority” means the Authority for Advance Rulings constituted
under section 245-O of the Income-tax Act, 1961;
(c) "Applicant" means any person, —
(i) holding a valid Importer-exporter Code Number granted u/s 7 of the Foreign
Trade (Development and Regulation) Act, 1992; or
(ii) exporting any goods to India; or
(iii) with a justifiable cause to the satisfaction of the Authority,
who makes an application for advance ruling under section 28H
(d) "Application" means an application made to the Authority under sub-section (1)
of section 28H;
(e) "Authority" means the Customs Authority for Advance Rulings appointed under
section 28EA;
(f) "Chairperson" means the Chairperson of the Appellate Authority;
(g) "Member" means a Member of the Appellate Authority and includes the
Chairperson; and
(h) “non-resident", "Indian company" and "foreign company" have the meanings
respectively assigned to them in clauses (30), (26) and (23A) of section 2 of the
Income-tax Act, 1961
SECTION 28 EA. Customs Authority for Advance Rulings. –

(1) The Board may, for the purposes of giving advance rulings under this Act, by
notification, appoint an officer of the rank of Principal Commissioner of Customs or
Commissioner of Customs to function as a Customs Authority for Advance Rulings:
(2) The offices of the Authority may be established in New Delhi and at such other
places, as the Board may deem fit.
(3) Subject to the provisions of this Act, the Authority shall exercise the powers and
authority conferred on it by or under this Act.
SECTION 28F. Authority for advance rulings. –

(1) Subject to the provisions of this Act, the Authority for Advance Rulings constituted
under section 245-O of the Income-tax Act, 1961 shall be the Appellate Authority for
deciding appeal under this Chapter and the said Appellate Authority shall exercise the
jurisdiction, powers and authority conferred on it by or under this Act:
Provided that the Member from the Indian Revenue Service (Customs and Central
Excise), who is qualified to be a Member of the Board, shall be the revenue Member
of the Appellate Authority for the purposes of this Act.
(3) On and from the date of appointment of the Customs Authority for Advance Rulings,
every application and proceeding pending before the erstwhile Authority for Advance
Rulings shall stand transferred to the Authority from the stage at which such
application or proceeding stood as on the date of such appointment.
SECTION 28H. Application for advance ruling. –

(1) An applicant desirous of obtaining an advance ruling under this Chapter may make
an application in such form and in such manner as may be prescribed, stating the
question on which the advance ruling is sought.
(2) The question on which the advance ruling is sought shall be in respect of, -
(a) classification of goods under the Customs Tariff Act, 1975;
(b) applicability of exemption notification issued u/s 25(1), having a bearing on
the rate of duty;
(c) the principles to be adopted for the purposes of determination of value of the
goods under the provisions of this Act.
(d) applicability of notifications issued in respect of tax or duties under this Act,
the Customs Tariff Act, 1975 and any tax or duty chargeable under any other
law for the time being in force in the same manner as duty of
customs leviable under this Act or Customs Tariff Act.
(e) determination of origin of the goods in terms of the rules notified under the
Customs Tariff Act, 1975 and matters relating thereto.
(f) any other matter as the Central Government may, by notification, specify.
(3) The application shall be made in quadruplicate and be accompanied by a fee
of 10,000 rupees
(4) An applicant may withdraw his application within 30 days from the date of the
application.
(5) The applicant may be represented by any person resident in India who is
authorised in this behalf.
SECTION 28I. Procedure on receipt of application. –

(1) On receipt of an application, the Authority shall cause a copy thereof to be
forwarded to the Principal Commissioner of Customs or Commissioner of Customs
and, if necessary, call upon him to furnish the relevant records:
Provided that where any records have been called for by the Authority in any case,
such records shall, as soon as possible, be returned to the Principal Commissioner of
Customs or Commissioner of Customs.
(2) The Authority may, after examining the application and the records called for, by
order, either allow or reject the application:
Provided that the Authority shall not allow the application where the question
raised in the application is -
(a) already pending in the applicant's case before any officer of customs, the
Appellate Tribunal or any Court;
(b) the same as in a matter already decided by the Appellate Tribunal or any Court:
Provided further that no application shall be rejected under this sub-section unless
an opportunity has been given to the applicant of being heard:
Provided also that where the application is rejected, reasons for such rejection shall
be given in the order.
(3) A copy of every order made under sub-section (2) shall be sent to the applicant
and to the Principal Commissioner of Customs or Commissioner of Customs.
(4) Where an application is allowed under sub-section (2), the Authority shall, after
examining such further material as may be placed before it by the applicant or obtained
by the Authority, pronounce its advance ruling on the question specified in the
application.
(5) On a request received from the applicant, the Authority shall, before pronouncing
its advance ruling, provide an opportunity to the applicant of being heard, either in
person or through a duly authorised representative.
Explanation. - For the purposes of this sub-section, "authorised representative" shall
have the meaning assigned to it in sub-section (2) of section 146A.
(6) The Authority shall pronounce its advance ruling in writing within 3 months of the
receipt of application.
(7) A copy of the advance ruling pronounced by the Authority, duly signed by the
Members and certified in the prescribed manner shall be sent to the applicant and to
the Principal Commissioner of Customs or Commissioner of Customs, as soon as may
be, after such pronouncement.
SECTION 28J. Applicability of advance ruling. –

(1) The advance ruling pronounced by the Authority under section 28-I shall be binding
only -
(a) on the applicant who had sought it;
(b) in respect of any matter referred to in sub-section (2) of section 28H;
(c) on the Principal Commissioner of Customs or Commissioner of Customs, and
the customs authorities subordinate to him, in respect of the applicant.
(2) The advance ruling referred to in sub-section (1) shall be binding as aforesaid
unless there is a change in law or facts on the basis of which the advance ruling has
been pronounced.
SECTION 28K. Advance ruling to be void in certain circumstances

(1) Where the Authority finds, on a representation made to it by the Principal
Commissioner of Customs or Commissioner of Customs or otherwise, that an advance
ruling pronounced by it under sub-section (6) of section 28-I has been obtained by the
applicant by fraud or misrepresentation of facts, it may, by order, declare such ruling
to be void ab initio and thereupon all the provisions of this Act shall apply to the
applicant as if such advance ruling had never been made.
Provided that in computing the period of 2 years referred to in clause (a) of sub-section
(1) of section 28, or 5 years referred to in sub-section (4) thereof, for service of notice
for recovery of any duty not levied, short-levied, not paid or short-paid on account of
the advance ruling, the period beginning with the date of such advance ruling and
ending with the date of the order under this sub-section shall be excluded.
(2) A copy of the order made under sub-section (1) shall be sent to the applicant and
the Principal Commissioner of Customs or Commissioner of Customs.
SECTION 28KA. Appeal.

(1) Any officer authorised by the Board, by notification, or the applicant may file an
appeal to the Appellate Authority against any ruling or order passed by the Authority,
within 60 days from the date of the communication of such ruling or order, in such
form and manner as may be prescribed:
Provided that where the Appellate Authority is satisfied that the appellant was
prevented by sufficient cause from presenting the appeal within the period so
specified, it may allow a further period of 30 days for filing such appeal.
(2) The provisions of sections 28-I and 28J shall, mutatis mutandis, apply to the appeal
under this section.
SECTION 28L. Powers of Authority. –

(1) The Authority or Appellate Authority shall, for the purpose of exercising its powers
regarding discovery and inspection, enforcing the attendance of any person and
examining him on oath, issuing commissions and compelling production of books of
account and other records, have all the powers of a civil court under the Code of Civil
Procedure, 1908.
(2) The Authority or Appellate Authority shall be deemed to be a civil court for the
purposes of section 195, but not for the purposes of Chapter XXVI of the Code of
Criminal Procedure, 1973, and every proceeding before the Authority or Appellate
Authority shall be deemed to be a judicial proceeding within the meaning of sections
193 and 228, and for the purpose of section 196, of the Indian Penal Code.
SECTION 28M. Procedure of Authority. –

(1) The Authority shall follow such procedure as may be prescribed.
(2) The Appellate Authority shall, subject to the provisions of this Chapter, have power
to regulate its own procedure in all matters arising out of the exercise of its powers
and authority under this Act.
SECTION 109A. Power to undertake controlled delivery

Notwithstanding anything contained in this Act, the proper officer or any other officer
authorised by him in this behalf, may undertake controlled delivery of any consignment
of such goods and in such manner as may be prescribed, to—
(a) any destination in India; or
(b) a foreign country, in consultation with the competent authority of such country
to which such consignment is destined.
Explanation. —For the purposes of this section “controlled delivery” means the
procedure of allowing consignment of such goods to pass out of, or into, the territory
of India with the knowledge and under the supervision of proper officer for identifying
the persons involved in the commission of an offence or contravention under this Act.
SECTION 110. Seizure of goods, documents and things. –

(1) If the proper officer has reason to believe that any goods are liable to confiscation
under this Act, he may seize such goods:
Provided that where it is not practicable to seize any such goods, the proper officer
may serve on the owner of the goods an order that he shall not remove, part with, or
otherwise deal with the goods except with the previous permission of such officer.
(1A) The Central Government may, having regard to the perishable or hazardous
nature of any goods, depreciation in the value of the goods with the passage of time,
constraints of storage space for the goods or any other relevant considerations, by
notification in the Official Gazette, specify the goods or class of goods which shall, as
soon as may be after its seizure under sub-section (1), be disposed of by the proper
officer in such manner as the Central Government may, from time to time, determine
after following the procedure hereinafter specified.
(1B) Where any goods, being goods specified under sub-section (1A), have been
seized by a proper officer under sub-section (1), he shall prepare an inventory of such
goods containing such details relating to their description, quality, quantity, mark,
numbers, country of origin and other particulars as the proper officer may consider
relevant to the identity of the goods in any proceedings under this Act and shall make
an application to a Magistrate for the purpose of -
(a) certifying the correctness of the inventory so prepared; or
(b) taking, in the presence of the Magistrate, photographs of such goods, and
certifying such photographs as true; or
(c) allowing to draw representative samples of such goods, in the presence of the
Magistrate, and certifying the correctness of any list of samples so drawn.
(1C) Where an application is made under sub-section (1B), the Magistrate shall, as
soon as may be, allow the application.
(2) Where any goods are seized under sub-section (1) and no notice in respect
thereof is given under clause (a) of section 124 within six months of the seizure of the
goods, the goods shall be returned to the person from whose possession they were
seized:
Provided that the Principal Commissioner of Customs or Commissioner of Customs
may, for reasons to be recorded in writing, extend such period to a further period not
exceeding 6 months and inform the person from whom such goods were seized before
the expiry of the period so specified:
Provided further that where any order for provisional release of the seized goods has
been passed under section 110A, the specified period of 6 months shall not apply.
(3) The proper officer may seize any documents or things which, in his opinion, will be
useful for, or relevant to, any proceeding under this Act.
(4) The person from whose custody any documents are seized under sub-section (3)
shall be entitled to make copies thereof or take extracts therefrom in the presence of
an officer of customs.
SECTION 110A. Provisional release of goods, documents and things

seized pending adjudication. –
Any goods, documents or things seized under section 110, may, pending the order of
the adjudicating authority, be released to the owner on taking a bond from him in the
proper form with such security and conditions as the adjudicating authority may
require.
SECTION 122. Adjudication of confiscations and penalties. –

In every case under this Chapter in which anything is liable to confiscation or any
person is liable to a penalty, such confiscation or penalty may be adjudged, -
(a) without limit, by a PC or C of Customs or a Joint Commissioner of Customs;
(b) up to such limit, by such officers, as the Board may, by notification, specify
SECTION 124. Issue of show cause notice before confiscation of

goods, etc. –
No order confiscating any goods or imposing any penalty on any person shall be made
under this Chapter unless the owner of the goods or such person -
(a) is given a notice in writing with the prior approval of the officer of Customs not
below the rank of an Assistant Commissioner of Customs, informing him of the
grounds on which it is proposed to confiscate the goods or to impose a penalty;
(b) is given an opportunity of making a representation in writing within such
reasonable time as may be specified in the notice against the grounds of
confiscation or imposition of penalty mentioned therein; and
(c) is given a reasonable opportunity of being heard in the matter:
Provided that the notice referred to in clause (a) and the representation referred to in
clause (b) may, at the request of the person concerned be oral.
Provided further that notwithstanding issue of notice under this section, the proper
officer may issue a supplementary notice under such circumstances and in such
manner as may be prescribed
SECTION 125. Option to pay fine in lieu of confiscation. –

(1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging
it may, in the case of any goods, the importation or exportation whereof is prohibited
under this Act or under any other law for the time being in force, and shall, in the case
of any other goods, give to the owner of the goods or, where such owner is not known,
the person from whose possession or custody such goods have been seized, an
option to pay in lieu of confiscation such fine as the said officer thinks fit:
Provided that where the proceedings are deemed to be concluded under the proviso
to sub-section (2) of section 28 or under clause (i) of sub-section (6) of that section in
respect of the goods which are not prohibited or restricted, the provisions of this
section shall not apply:
Provided further that, without prejudice to the provisions of the proviso to sub-section
(2) of section 115, such fine shall not exceed the market price of the goods confiscated,
less in the case of imported goods the duty chargeable thereon.
(2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1),
the owner of such goods or the person referred to in sub-section (1), shall, in addition,
be liable to any duty and charges payable in respect of such goods.
(3) Where the fine imposed under sub-section (1) is not paid within a period of one
hundred and twenty days from the date of option given thereunder, such option shall
become void, unless an appeal against such order is pending.
Explanation.—For removal of doubts, it is hereby declared that in cases where an
order under sub-section (1) has been passed before the date on which the Finance
Bill, 2018 receives the assent of the President and no appeal is pending against such
order as on that date, the option under said sub-section may be exercised within a
period of one hundred and twenty days from the date on which such assent is received.
SECTION 128A. Procedure in appeal. –

(1) The Commissioner (Appeals) shall give an opportunity to the appellant to be heard
if he so desires.
(2) The Commissioner (Appeals) may, at the hearing of an appeal, allow the
appellant to go into any ground of appeal not specified in the grounds of appeal, if
the Commissioner (Appeals) is satisfied that the omission of that ground from the
grounds of appeal was not wilful or unreasonable.
(3) The Commissioner (Appeals) shall, after making such further inquiry as may be
necessary, pass such order, as he thinks just and proper, —
(a) confirming, modifying or annulling the decision or order appealed against; or
(b) referring the matter back to the adjudicating authority with directions for fresh
adjudication or decision, as the case may be, in the following cases, namely: —
(i) where an order or decision has been passed without following the principles of
natural justice; or:
(ii) where no order or decision has been passed after re-assessment under section
17; or
(iii) where an order of refund under section 27 has been issued by crediting the
amount to Fund without recording any finding on the evidence produced by the
applicant.
Provided that an order enhancing any penalty or fine in lieu of confiscation or
confiscating goods of greater value or reducing the amount of refund shall not be
passed unless the appellant has been given a reasonable opportunity of showing
cause against the proposed order:
Provided further that where the Commissioner (Appeals) is of opinion that any
duty has not been levied or has been short-levied or erroneously refunded, no order
requiring the appellant to pay any duty not levied, short-levied or erroneously refunded
shall be passed unless the appellant is given notice within the time-limit specified in
section 28 to show cause against the proposed order.
(4) The order of the Commissioner (Appeals) disposing of the appeal shall be in
writing and shall state the points for determination, the decision thereon and the
reasons for the decision.
(4A) The Commissioner (Appeals) shall, where it is possible to do so, hear and decide
every appeal within a period of 6 months from the date on which it is filed.
(5) On the disposal of the appeal, the Commissioner (Appeals) shall communicate the
order passed by him to the appellant, the adjudicating authority, the Principal Chief
Commissioner of Customs or Chief Commissioner of Customs and the PC or C of
Customs.
143AA. Power to simplify or provide different procedure, etc., to

facilitate trade.
Notwithstanding anything contained in any other provision of this Act, the Board may,
for the purposes of facilitation of trade, take such measures or prescribe separate
procedure or documentation for a class of importers or exporters or for categories of
goods or on the basis of the modes of transport of goods, in order to, —
(a) maintain transparency in the import and export documentation; or
(b) expedite clearance or release of goods entered for import or export; or
(c) reduce the transaction cost of clearance of importing or exporting goods; or
(d) maintain balance between customs control and facilitation of legitimate trade.
SECTION 151B. Reciprocal arrangement for exchange of

information facilitating trade.
(1) The Central Government may enter into an agreement or any other arrangement
with the Government of any country outside India or with such competent authorities
of that country, as it deems fit, for facilitation of trade, enforcing the provisions of this
Act and exchange of information for trade facilitation, effective risk analysis,
verification of compliance and prevention, combating and investigation of offences
under the provisions of this Act or under the corresponding laws in force in that country.
(2) The Central Government may, by notification, direct that the provisions of this
section shall apply to the contracting State with which reciprocal agreement or
arrangements have been made, subject to such conditions, exceptions or
qualifications as may be specified in that notification.
(3) Subject to the provisions of sub-section (2), the information received under sub-
section (1) may also be used as evidence in investigations and proceedings under this
Act.
(4) Where the Central Government has entered into a multilateral agreement for
exchange of information or documents for the purpose of verification of compliance in
identified cases, the Board shall specify the procedure for such exchange, the
conditions subject to which such exchange shall be made and designation of the
person through whom such information shall be exchanged.
(5) Notwithstanding anything contained in sub-section (1) or sub-section (2) or sub-

section (3), anything done or any action taken or purported to have been done or
taken, in pursuance to any agreement entered into or any other arrangement made by
the Central Government prior to the date on which the Finance Bill, 2018 receives the
assent of the President, shall be deemed to have been done or taken under the
provisions of this section.
Explanation. —For the purposes of this section, the expressions, —

(i) “contracting State” means any country outside India in respect of which agreement
or arrangements have been made by the Central Government with the Government or
authority of such country through an agreement or otherwise;
(ii) “corresponding law” means any law in force in the contracting State corresponding
to any of the provisions of this Act or dealing with offences in that country
corresponding to any of the offences under this Act.
SECTION 152. Delegation of powers. –

The Central Government may, by notification in the Official Gazette, direct that subject
to such conditions, if any, as may be specified in the notification -
(a) any power exercisable by the Board under this Act shall be exercisable also
by a PCC or CC of Customs or a PC or C of Customs empowered in this behalf
by the Central Government;
(b) any power exercisable by a PC or Cof Customs under this Act may be exercisable
also by a Joint Commissioner of Customs or an AC or DC of Customs empowered
in this behalf by the Central Government;
(c) any power exercisable by a Joint Commissioner of Customs under this Act may
be exercisable also by an AC or DC of Customs empowered in this behalf by the
Central Government;
(d) any power exercisable by a 5[AC or DC of Customs] under this Act may be
exercisable also by a Gazetted Officer of Customs empowered in this behalf by
the Board.
SECTION 153. Service of order, decision, etc. –

(1) An order, decision, summons, notice or any other communication under this Act or
the rules made thereunder may be served in any of the following modes, namely: —
(a) by giving or tendering it directly to the addressee or importer or exporter or his
customs broker or his authorised representative including employee, advocate or any
other person or to any adult member of his family residing with him;
(b) by a registered post or speed post or courier with acknowledgement due, delivered
to the person for whom it is issued or to his authorised representative, if any, at his
last known place of business or residence;
(c) by sending it to the e-mail address as provided by the person to whom it is issued,
or to the e-mail address available in any official correspondence of such person;
(d) by publishing it in a newspaper widely circulated in the locality in which the person
to whom it is issued is last known to have resided or carried on business; or
(e) by affixing it in some conspicuous place at the last known place of business or
residence of the person to whom it is issued and if such mode is not practicable for
any reason, then, by affixing a copy thereof on the notice board of the office or
uploading on the official website, if any.
(2) Every order, decision, summons, notice or any communication shall be deemed to
have been served on the date on which it is tendered or published or a copy thereof
is affixed or uploaded in the manner provided in sub-section (1).
(3) When such order, decision, summons, notice or any communication is sent by
registered post or speed post, it shall be deemed to have been received by the
addressee at the expiry of the period normally taken by such post in transit unless the
contrary is proved.
Practice Questions
Question 1
Briefly explain the following with reference to the Customs (Determination of Value of Imported
Goods) Rules, 2007:
i. Goods of the same class or kind
ii. Computed value
Answer
(i) As per Rule 2(1)(c) of Customs Valuation (Determination of Value of Imported
Goods) Rules, 2007, goods of the same class or kind, means imported goods that are
within a group or range of imported goods produced by a particular industry or industrial
sector and includes identical goods or similar goods.
(ii) As per Rule 2(1)(a) of the said rules, computed value means the value of imported goods
determined in accordance with Rule 8.
Question 2
In the context of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007,
Explain the meaning of:
i. Similar goods
ii. Identical goods
Question 3
What is residual method of valuation? Bring out your answer with reference to the Customs
Valuation (Determination of Price of Imported Goods) Rules, 2007.
Answer: Rule 9(1) of the Customs Valuation (Determination of Price of Imported Goods)
Rules, 2007 provides the residual method of valuation.
Question 4
State the requirements to be satisfied to accept transaction value under rule 3(2) of the
Customs Valuation (Determination of Price of Imported Goods) Rules, 2007.
Question 5
A material was imported by air at CIF price of 5,000 US$. Freight paid was 1,500 US$ and insurance
cost was 500 US$. The banker realized the payment from importer at the exchange rate of 61 per
dollar. Central Board of Excise and Customs notified the exchange rate as 60 per US$. Find the value
of the material for the purpose of levying duty.
Answer
Computation of assessable value
Particulars Amount
CIF value 5000 US $
Less: Freight 1500 US $
Less: Insurance 500 US $
Therefore, FOB value 3000 US $
Assessable value for Customs purpose

FOB value 3000 US $
Add: Freight (20% of FOB value) [Note 1] 600 US $

Add: Insurance (actual) 500 US $
CIF for customs purpose 4100 US $
Exchange rate as per CBEC [Note 2] 60 per US $
Assessable value (` 60 x 4141 US $) 2,46,000
Notes:
1. If the goods are imported by air, the freight cannot exceed 20% of FOB price [Second proviso
to rule 10(2) of the Customs (Determination of Value of Imported Goods) Rules, 2007].
2. Rate of exchange determined by CBEC is considered [clause (a) of the explanation to
section 14 of the Customs Act, 1962].
Question 6
From the particulars given below, find out the assessable value of the imported goods under
the Customs Act, 1962:
US $
(i) Cost of the machine at the factory of the exporter 10,000
(ii) Transport charges from the factory of exporter to the port for shipment 500
(iii) Handling charges paid for loading the machine in the ship 50
(iv) Buying commission paid by the importer 50
(v) Freight charges from exporting country to India 1,000
(vi) Exchange rate to be considered: 1$ = 60
(vii) Actual insurance charges paid are not ascertainable
Answer
Computation of assessable value of the imported goods
US $
Cost of the machine at the factory 10,000.00
Transport charges up to port 500.00
Handling charges at the port 50.00
FOB 10,550.00
Freight charges up to India 1,000.00
Insurance charges @ 1.125% of FOB [Note 1] 118.69
CIF 11,668.69
CIF in Indian rupees @ 60/ per $ 7,00,121.40
Assessable Value (rounded off) 7,00,121
Notes:
(1) Insurance charges have been included @ 1.125% of FOB value of goods.
(2) Buying commission is not included in the assessable value [Rule 10(1)(a)(i) of the Customs
Valuation (Determination of Value of Imported Goods) Rules, 2007].
Question 7
Compute export duty from the following data:
(i) FOB price of goods: US $ 1,00,000.

(ii) Shipping bill presented electronically on 26.04.20XX.
(iii) Proper officer passed order permitting clearance and loading of goods for export (Let Export
Order) on 04.05.20XX.
(iv) Rate of exchange and rate of export duty are as under:

Rate of Exchange Rate of Export Duty
On 26.04.20XX 1 US $ = 55 10%
On 04.05.20XX 1 US $ = 56 8%
v) Rate of exchange is notified for export by Central Board of Excise and Customs.
(Make suitable assumptions wherever required and show the workings.)
Answer
Computation of export duty
Particulars Amount (US $)

FOB price of goods [Note 1] 1,00,000
Amount (Rs)
Value in Indian currency (US $ 1,00,000 x 55) [Note 2] 55,00,000
Export duty @ 8% [Note 3] 4,40,000
Notes:
1. As per section 14(1) of the Customs Act, 1962, assessable value of the export goods is the
transaction value of such goods which is the price actually paid or payable for the goods
when sold for export from India for delivery at the time and place of exportation.
2. As per third proviso to section 14(1) of the Customs Act, 1962, assessable value has to be
calculated with reference to the rate of exchange notified by the CBEC on the date of
presentation of shipping bill of export.
3. As per section 16(1)(a) of the Customs Act, 1962, in case of goods entered for export, the
rate of duty prevalent on the date on which the proper officer makes an order permitting
clearance and loading of the goods for exportation, is considered.
Question 8
A consignment of 800 metric tonnes of edible oil of Malaysian origin was imported by a charitable
organization in India for free distribution to below poverty line citizens in a backward area under the
scheme designed by the Food and Agricultural Organization. This being a special transaction, a
nominal price of US$
10 per metric tonne was charged for the consignment to cover the freight and insurance charges. The
Customs House found out that at or about the time of importation of this gift consignment there were
following imports of edible oil of Malaysian origin:
S. No. Quantity imported in metric tonnes Unit price in US $ (CIF)
1. 20 260
2. 100 220
3. 500 200
4. 900 175
5. 400 180
6. 780 160
The rate of exchange on the relevant date was 1 US $ = 60.00 and the rate of basic customs duty was
10% ad valorem. Ignore Integrated tax and GST Compensation Cess. Calculate the amount of duty
leviable on the consignment under the Customs Act, 1962 with appropriate assumptions and
explanations, where required.
Answer
Determination of transaction value of the subject goods: -
In the instant case, while determining the transaction value of the goods, following factors need consideration:
-
1. In the given case, US $10 per metric tonne has been paid only towards freight and insurance
charges and no amount has been paid or payable towards the cost of goods. Thus, there is
no transaction value for the subject goods. Consequently, we have to look for transaction
value of identical goods under rule 4 of Customs Valuation (Determination of Value of
Imported Goods) Rules, 2007.
2. Rule 4(1)(a) of the aforementioned rules provides that subject to the provisions of rule 3, the
value of imported goods shall be the transaction value of identical goods sold for export to
India and imported at or about the same time as the goods being valued. In the six imports
given during the relevant time, the goods are identical in description and of the same country
of origin.
3. Further, clause (b) of rule 4(1) of the said rules requires that the comparable import should
be at the same commercial level and in substantially same quantity as the goods being
valued. Since, nothing is known about the level of the transactions of the comparable
consignments, it is assumed to be at the same commercial level.
4. As far as the quantities are concerned, the consignments of 20 and 100 metric tonnes cannot
be considered to be of substantially the same quantity. Hence, remaining 4 consignments
are left for our consideration.
5. However, the unit prices in these 4 consignments are different. Rule 4(3) of Customs
Valuation (DVIG) Rules, 2007 stipulates that in applying rule 4 of the said rules, if more
than one transaction value of identical goods is found, the lowest of such value shall be used
to determine the value of imported goods. Accordingly, the unit price of the consignment
under valuation would be US $ 160 per metric tonne
Computation of amount of duty payable

Assessable Value = CIF value of 800 metric tonnes:
= 800 x 160 = US $ 1,28,000
At the exchange rate of $ 1 = 60 CIF Value (in Rupees) 76,80,000
10% of Ad Valorem duty on 76,80,000 7,68,000
Add: SWS @ 10% 76,800
Total custom duty payable 8,44,800
Question 9
Compute the assessable value and customs duty payable from the following information:
(i) F.O.B. value of machine 8,000 UK Pounds
(ii) Freight paid (air) 2,500 UK Pounds

Design and development
(iii) 500 UK Pounds
charges paid in UK
Commission payable to local
(iv) @ 2% of price of machine in Indian rupees
agent
24.10.20xx (Rate BCD 10%; Exchange rate as
(v) Date of bill of entry
notified by CBEC Rs. 100 per UK Pound)
20.10.20xx (Rate of BCD 20%; Exchange rate as

(vi) Date of arrival of aircraft
notified by CBEC Rs. 98 per cent UK Pound)
(vii) Integrated tax leviable u/s 3(7) of the Customs Tariff Act, 1975 is 12%
(viii) Insurance charges have been actually paid but details are not available.
Compute the assessable value of the machine and the customs duty payable by Foreign Trade
International Ltd.
Note: Ignore GST Compensation Cess.
Answer
Computation of assessable value and duty thereon:
FOB value 8,000 UK pounds
Add: Design and development charges 500 UK pounds
Total 8500 UK pounds
Total in Rs @ 100 per pound 8,50,000.00
Add: Local agency commission

16,000.00
(2% of 8000 UK pounds x 100)
FOB value 8,66,000.00
Add: Freight (air) (2500 x 100= 2,50,000) (restricted to 20% of FOB

1,73,200.00
8,66,000 x 20%)
Add: Insurance 1.125% of FOB 9,742.50
Assessable value (C.I.F value) 10,48,942.50
Add: Basic custom duty @ 10% 1,04,894.25

Add: SWS (10% of custom duty)
= 10% of Rs. 1,04,894.25 10,489.43
Total 11,64,326.18
Add: Integrated Tax @ 12% 1,39,719.14

2,55,102.82
Total duty payable:
Rounded off
2,55,103
1. Design and development charges paid in UK and commission paid to local agent (since it is
not buying commission) are includible in the assessable value
2. The rate of exchange notified by the CBEC on the date of presentation of bill of entry has
been considered [Section 14 of the Customs Act, 1962].
3. If the goods are imported by air, the freight cannot exceed 20% of FOB price .
4. Where the insurance charges are not ascertainable, such cost is taken as 1.125% of FOB
value of the goods.
5. Section 15 of the Customs Act, 1962 provides that rate of duty shall be the rate in force on
the date of presentation of bill of entry or the rate in force on the date of arrival of aircraft,
whichever is later.
6. Integrated tax leviable under section 3(7) of the Customs Tariff Act, 1975 is levied on the
aggregate of the assessable value of the imported goods and all customs duties.
Question 10
Assessable value of an item imported is 1,00,000. Basic customs duty is 10%, additional duty of
customs leviable under section 3(7) of the Customs Tariff Act is 12%, and education cesses are 3% on
duty. Compute the amount of total customs duty payable.
Note: Ignore GST Compensation Cess
Answer
Computation of customs duty payable
Particulars Rs
1. Assessable Value 1,00,000
2. Basic customs duty @ 10% 10,000
3. SWS 10% on 10,000 1,000

4. Sub-total 1,11,000
4. Additional duty u/s 3(7) of the Customs Tariff Act @ 12% of 13,320
1,11,000
6. Total customs duty payable [(2) + (4) + (5)] 24,320
Question 11
From the following particulars, calculate assessable value and total customs duty payable:
(i) Date of presentation of bill of entry: 20.6.20XX [Rate of BCD 20%; Inter-bank exchange rate:
61.60 and rate notified by CBEC 62].
(ii) Date of arrival of aircraft in India: 30.6.20XX [Rate of BCD 10%; Inter-bank exchange rate: 61.80
and rate notified by CBEC 63.00].
(iii) Rate of Integrated tax leviable under section 3(7) of the Customs Tariff Act: 12%. Ignore GST
Compensation Cess.
(iv) CIF value 2,000 US Dollars; Air freight 500 US Dollars, Insurance cost 100 US Dollars.
(v) Education Cess 2% & Secondary & Higher Education Cess 1%
Particulars Amount
CIF value 2000 US Dollars
Less: Freight 500
Insurance 100 600 US Dollars
FOB Value 1400 US Dollars
Add: Air Freight [Note1] 280
Insurance (actual amount) 100 380 US Dollars
1780 US Dollars
Rs.
Assessable Value @ 62.00 [Note 2] 1,10,360.00
Basic Custom Duty @ 10% (a) [Note 3] 11,036.00
SWS @ 10 % on 11,036.00 (b) 1,103.60
Total 1,22,499.60
Integrated tax under section 3(7) 14,699.95

(12% on 1,22,499.60) (c)
Total duty 26,839.55

Total duty (rounded off) 26,840
(1) If the goods are imported by air, the freight and handling charges cannot exceed 20% of FOB
price.
(2) Rate of exchange notified by CBEC on the date of presentation of bill of entry would be the
applicate rate.
(3) Rate of duty would be the rate as prevalent on the date of filing of bill of entry or arrival of
aircraft, whichever is later [proviso to section 15 of the Customs Act, 1962].
(4) Integrated tax leviable under section 3(7) of the Customs Tariff Act, 1975 is levied on the
Question 12:
15000 chalices were imported for charitable distribution in India by XY Charitable Trust. The Trust did
not pay either for the cost of goods or for the design and development charges, which was borne by
the supplier. Customs officer computed its FOB value at USD 20,000 (including design and
development charges), which was accepted by the Trust. Other details obtained were as follows:
Particulars Amount
1 Freight paid (air) (in USD) 4,500
2 Design & development charges paid in USA (in USD) 2,500
3 Commission payable to an agent in India 12,500
4 Exchange rate notified by CBEC and rate of basic duty is as follows
Date of bill of entry BCD Exchange Rate
08.09.20xx 20% 60
Date of arrival of Aircraft
30.09.20xx 10% 62
The interbank rate was 1USD = 63
5 Integrated tax payable u/s 3(7) of the Customs Tariff Act, 1975 12%
Compute the assessable value and amount of total customs duty payable under the Customs Act,
1962. Make suitable assumptions where required. Working notes should form part of your answer.
Note: Ignore GST Compensation Cess
Answer
Computation of assessable value and customs duty payable thereon
Particulars Amount
FOB value computed by Customs Officer (including design and development 20,000 US $
charges)
Exchange rate [Note 1] 60 per $
Rs
FOB value computed by Customs Officer (in rupees) 12,00,000
Add: Commission payable to agent in India 12,500
FOB value as per customs 12,12,500
Add: Air freight (12,12,500 × 20%) [Note 2] 2,42,500
Add: Insurance (1.125% of 12,12,500) [Note 3] 13,641
CIF value for customs purposes 14,68,641
Add: Basic custom duty @ 10% (14,68,641 × 10%) –rounded off [Note 4] 1,46,864
SWS = 10% of 1,46,864 [rounded off] 14,686
Total 16,30,191
Integrated tax leviable under section 3(7) of Customs Tariff Act, 1975 (CTA) @ 1,95,623
12% (1630191× 12%) [Rounded off]
Total customs duty payable 357173
Note:
1. Rate of exchange notified by CBEC on the date of filing of bill of entry has to be considered.
2. In case of goods imported by air, freight cannot exceed 20% of FOB value.
3. Insurance charges, when not ascertainable, have to be included @ 1.125% of FOB value of
goods.
4. Rate of duty will be the rate in force on the date of presentation of bill of entry or on the date of
arrival of the aircraft, whichever is later.
Question 13
Mr. Backpack imported second-hand goods from a UK supplier by air, which was contracted on CIF
basis. However, there were changes in prices in the international market between the date of contract
and actual importation. As a result of several negotiations, the parties agreed for a negotiated price
payable as follows:
Particulars Contract Price (₤) Changed Price (₤) Negotiated Price (₤)
CIF Value 5000 5800 5500
Air Freight 300 600 500
Insurance 500 650 600
Other details for computing assessable value and duty payable are tabled below:
Particulars Amount
Vendor inspection charges (inspection carried out by foreign supplier on his own, not ₤ 600
required under contract or for making the goods ready for shipment)
Commission payable to local agent @ 1% of FOB in local currency
Date of bill of entry Basic customs duty Exchange rate in Rs (notified by CBEC)
18.02.20XX 10% 102
Date of arrival of aircraft Basic custom duty Exchange rate in Rs (notified by CBEC)
15.02.20XX 15% 98
Inter-bank rate 1 UK Pound = 106
Compute the assessable value and customs duty payable by Mr. Backpack.
Answer
Computation of custom duty payable
Particulars Amount (£)

CIF value (negotiated price) [Note-1] 5,500
Less: Air freight 500
Less: Insurance 600
FOB value 4,400
Add: Vendor inspection charges [Note-2] Nil
Freight [Note-3] 500
Insurance [Note-4] 600
5,500
Exchange rate is 102 per £ [ Note-5]
Rs
Value in rupees 5,61,000.00
Add: Commission payable to local agent [1% of FOB value] [Note-6] = (US $ 4,400 4,488.00
× 102) × 1%
Total Assessable value 5,65,488.00
Add: Basic custom duty @ 10% [Note-7] – rounded off 56,549
SWS (10% of 56,549) [rounded off] 5,655
Customs duty payable [rounded off] 62,204
Notes:
1. As per Section 14 of the Customs Act, 1962, the value of the imported goods is the transaction
value, which means the price actually paid or payable for the goods. In this case, since the
contract was re-negotiated and the importer paid the re-negotiated price, the transaction value
would be such re-negotiated price and not the contract price.
2. Only the payments actually made as a condition of sale of the imported goods by the buyer to
the seller are includible in the assessable value under rule 10(1)(e) of the Customs Valuation
(Determination of Value of Imported Goods) Rules, 2007. Charges of vendor inspection on
the goods carried out by foreign supplier on his own and not required for making the goods
ready for shipment, are not includible in the assessable value of the imported goods [Bombay
Dyeing & Mfg. v. CC 1997 (90) ELT 276 (SC)].
3. Actual amount incurred towards freight will be considered since freight is not more than 20%
of FOB value [Second proviso to rule 10(2) of Customs Valuation Rules].
4. Actual insurance charges paid are includible in the assessable value as per rule 10(2)(c) of
the Customs Valuation Rules.
5. Rate of exchange notified by CBEC on the date of filing of bill of entry will be considered as
per third proviso to section 14 of the Customs Act, 1962.
6. Commission paid to local agent (since it is not buying commission) is includible in the
assessable value on the presumption that local agent has been appointed by the exporter
[Rule 10(1)(a)(i) of the Customs Valuation Rules].
7. As per proviso to section 15 of the Customs Act, 1962, rate of duty will be the rate in force
on the date of presentation of bill of entry or on the date of arrival of the aircraft, whichever is
later.
Question 14
F. Ltd. imported a machine from UK in May, 20XX. The details in this regard are as under:
(i) FOB value of the machine: 10,000 UK Pound

(ii) Freight (Air): 3000 UK Pound
(iii) Licence fee, the buyer was required to pay in UK: 400 UK Pound
(iv) Buying commission paid in India 20,000
(v) Date of bill of entry was 20.05.20XX and the rate of exchange notified by CBEC on this
date was 99.00 per one pound. Rate of BCD was 7.5%.
(vi) Date of arrival of aircraft was 25.05.20XX and the rate of exchange notified by CBEC on
this date was 98.50 per pound and rate of BCD was 10%.
(vii) Rate of additional customs duty under section 3(7) of Customs Tariff Act was 12% and
ignore GST Compensation Cess.
(viii) Insurance premium details were not available.
You are required to compute the assessable value of the machine for valuation of customs duty and
the total duty payable. You may make suitable assumptions wherever required.
Answer
Computation of assessable value and total customs duty payable by F. Ltd.
Particular Amount (£)

FOB value 10,000
Add: License fee required to be paid in UK [Note – 1] 400
Customs FOB value 10,400
Exchange rate is 99 per £ [Note – 2]
Rs
Value in rupees 10,29,600.00
Add: Air freight [Restricted to 20% of 10,29,600 (customs FOB value)] [Note – 3] 2,05,920.00
Insurance @ 1.125% of 10,29,600 [Note – 4] 11,583.00
Buying commission is not includible in the assessable value [Note – 5]
Assessable value 12,47,103.00

Add: Basic custom duty @ 10% (12,47,103 × 10%) –rounded off (A): Rate of duty 1,24,710
is 10% [Note – 6]
SWS (B) (10% of 1,24,710) [rounded off] 12,471
Value for additional duty of customs under section 3(7) of the Customs Tariff Act, 13,84,284
1975
Add: Additional duty of customs under section 3(7) @ 12% - rounded off (C) 1,66,114
[Note – 7]
Total customs duty payable [rounded off] 3,03,295
Note:
1. Engineering and design charges paid in UK, licence fee relating to imported goods payable
by the buyer as a condition of sale, materials and components supplied by the buyer free of
cost and actual insurance charges paid are all includible in the assessable value.
2. Rate of exchange notified by CBEC on the date of filing of bill of entry has to be considered.
3. In case of goods imported by air, freight cannot exceed 20% of FOB value.
4. Insurance charges, when not ascertainable, have to be included @ 1.125% of FOB value of
goods.
5. Buying commission is not included in the assessable value.
6. Rate of duty will be the rate in force on the date of presentation of bill of entry or on the date
of arrival of the aircraft, whichever is later.
Question 15
M/s IES Ltd. (assessee) imported certain goods at US$ 20 per unit from an exporter who was
holding 30% equity in the share capital of the importer company. Subsequently, the assessee
entered into an agreement with the same exporter to import the said goods in bulk at US $ 14
per unit. When imports at the reduced price were effected pursuant to this agreement, the
Department rejected the transaction value stating that the price was influenced by the
relationship and completed the assessment on the basis of transaction value of the earlier
imports i.e., at US $20 per unit under rule 4 of the Customs Valuation (Determination of Value
of Imported Goods) Rules 2007, viz transaction value of identical goods. State briefly, whether
the Department's action is sustainable in law, with reference to decided cases, if any.
Answer
No, the Department’s action is not sustainable in law. Rule 2(2) of Customs Valuation
(Determination of Value of Imported Goods) Rules, 2007 inter alia provides that persons shall
be deemed to be "related" if one of them directly or indirectly controls the other. The word
“control” has not been defined under the said rules. As per common parlance, control is
established when one enterprise holds at least 51% of the equity shareholding of the other
company. However, in the instant case, the exporter company held only 30% of shareholding
of the assessee. Thus, Exporter Company did not exercise control over the assessee. So, the
two parties cannot be said to be related.
The fact that assessee had made bulk imports could be a reason for reduction of import price.
The burden to prove under valuation lies on the Revenue and in absence of any evidence
from the Department to prove under-valuation, the price declared by the assessee is
acceptable.
In the light of foregoing discussion, it could be inferred that Department’s action is not
sustainable in law.
Question 16
Examine the validity of the following statements with reference to the Customs Act, 1962 giving
brief reasons.
(i) Service charges paid to canalizing agent are not includible in the assessable value of
imports.
(ii) Design and engineering charges are includible in the assessable value of the imported
goods only if the goods imported are specifically manufactured on the basis of the design
and engineering specifications provided by the importer.
(iii) Inspection charges are not includible in the assessable value of the imported goods if
contract does not specify for certification by an independent agency.
(iv) Goods exempt from basic customs duty would automatically be exempt from additional
duty of customs.
Answer
(i) The statement is not correct. Since the canalizing agent is not the agent of the importer
nor does he represent the importer abroad, purchases by canalizing agency from
foreign seller and subsequent sale by it to Indian importer are independent of each
other. Hence, the commission or service charges paid to the canalizing agent are
includible in the assessable value as these cannot be termed as buying commission
[Hyderabad Industries Ltd. v. UOI 2000 (115) ELT 593 (SC)].
(ii) The Supreme Court in the case of TISCO Ltd. v. CCEx. & Cus. 2000 (116) ELT 422
(SC) has held that design and engineering charges paid for use during construction,
erection, assembly etc. of imported goods, being relatable to post import activity, are
not includible in the value. Thus, the design and engineering charges which relate to
pre-importation activity are only includible in the value. Since, in this case the design
and engineering charges are paid for manufacturing the imported product, i.e., they
relate to pre-importation activity, the same are includible in the value. Thus, the
statement is correct.
Note: Explanation to rule 10(1) of the Customs Valuation (Determination
Imported Goods) Rules 2007 clarifies that the royalty, licence fee or any other
payment for using a process shall be added to the price actually paid or payable,
notwithstanding the fact that such goods may be subjected to the said process after
their importation if such payments are related to imported goods and are a condition of
the sale of imported goods.
(iii) The statement is correct. Where there is no requirement in the contract for
independent inspection and the inspection is carried out by foreign supplier on his own
and is not required for the purpose of fulfilling the condition of the contract, then such
charges incurred on inspection are not includible in assessable value [Bombay
Dyeing & Mfg. v. CC 1997 (90) ELT 276 (SC)].
(iv) The statement is not correct. Exemption from basic customs duty would not mean
exemption from additional duty. When goods are exempted from basic customs duty
in terms of section 12 of the Customs Act, 1962 it would not mean that they are
exempted from additional duty of customs also, as basic customs duty is leviable by
virtue of section 12 of the Customs Act, 1962 while additional customs duty is leviable
under section 3 of the Customs Tariff Act, 1975 [Kaur Sarin Traders v. Union of India
2006 (199) ELT 224 (Pat.)].
Question 17
Compute the assessable value for purpose of determination of customs duty from the following
data:
US $
Machinery imported from USA by air (FOB price) 4,000
Accessories compulsorily alongwith the machinery 1,000
Air freight 1,200
Insurance charges Actuals not available
Local agent’s commission 200
Transportation from Indian airport to factory Rs.4,000
Exchange rate US $ 1 = Rs. 48
Provide explanations where necessary.
Answer:
Computation of Assessable Value of Machinery and Accessories
Accessories Machinery
US $ US $
FOB price 1,000.00 4,000.00
Add: Local agent’s commission (allocated on pro-rata 40.00 160.00
basis) [Note 4]
Revised FOB 1040 4160
Add: Air Freight (restricted to 20% of FOB price) [Note 208.00 832.00
2]
Add: Insurance charges (1.125% of FOB price) [Note 11.70 46.80
3]
Total CIF price 1,259.70 5,038.80
Exchange rate 1US $ = Rs. 48
CIF in Indian currency = Assessable value 60,465.60 2,41,862.40
Notes:
(1) Since the price of the accessories is not included in the price of the machinery and is
charged separately, the accessories will not be charged at the same rate as applicable
to the machinery. Hence, separate assessable values for the machinery and
accessories have been computed [Proviso (a) to section 19 of the Customs Act, read
with Accessories (Condition) Rules, 1963]
(2) If the goods are imported by air, the freight cannot exceed 20% of FOB price.
(3) Insurance charges are taken as 1.125% of FOB price if actual charges are not known.
(4) The commission paid to local agent is includible as it is not a buying commission [Rule
10(1)(a)(i)].
(5) Transportation charges from Indian airport to factory of importer are not includible in the
assessable value.
Question 18
Write a brief note on the following with reference to the Customs Act, 1962:
i. Remission of duty on imported goods lost
ii. Pilfered goods
Answer
(i) Remission of duty on imported goods lost: Section 23(1) of the Customs Act, 1962
provides for remission of duty on imported goods lost (otherwise than as a result of pilferage)
or destroyed, if such loss or destruction is at any time before clearance for home
consumption. Such loss or destruction covers loss by leakage. Duty is payable under this
section but it is remitted by Assistant/Deputy Commissioner of Customs if the importer is able
to prove the loss or destruction. Thus, unless remitted, duty has to be paid and burden of proof
is on the importer. Remission is at the discretion of Customs authorities. The provisions
of this section are applicable for warehoused goods also.
(ii) Pilfered goods: Section 13 provides that if imported goods are pilfered after unloading
thereof but before the proper officer has made an order for clearance for home
consumption or deposit in a warehouse, no duty is payable on the goods, unless the pilfered
goods are restored to importer. In such a case, duty on pilfered goods is payable by the
Port authorities. Also, the importer does not have to prove pilferage. However, the loss must
be only due to pilferage. Section 13 is not applicable for warehoused goods.
Question 19
Distinguish between Pilfered goods and Lost/destroyed goods
Answer
Pilfered goods Lost/Destroyed goods
1. Covered by section 13 Covered by section 23(1)
2. Department gets compensation from No such compensation
the custodian [Section 45(3)]
3. Mandatory benefit Remission is discretionary
4. Petty theft by human being Loss/Destruction by fire, flood etc (Act of
God)
5. Restoration possible Restoration is not possible
6. Occurrence is after unloading and Occurrence may be at any time before
before Customs clearance order for clearance for home consumption
home consumption or warehousing
7. Occurrence in warehouse not Occurrence in warehouse is recognised
recognised
8. Duty need not be calculated Duty should be calculated for determining
the remission amount
9. No need to prove pilferage. It is quite Should be proved and remission sought for.
obvious
10. Refund arises if pilferage takes place Question of refund does not arise at all.
after paying duty

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Section 9: Levy of Central goods and service tax [CGST]

(3) The Government may, on the recommendations of the Council, by notification,

(5) The Government may, on the recommendations of the Council, by notification,

Addition of Service in RCM

15 Services supplied Individual NIL A banking 100%

Pure services provided to the Central Government, State Government or Union

5. Services by a Central Government, State Government, Union territory, local

9D Services by an old age home run by Central Government, State Government or

10A. Services supplied by electricity distribution utilities by way of construction,

19A. Services by way of transportation of goods by an aircraft from customs station of

19B. Services by way of transportation of goods by a vessel from customs station of

24A. Services by way of warehousing of minor forest produce

31A. Services by Coal Mines Provident Fund Organisation to persons governed by

34A. Services supplied by Central Government, State Government, Union territory to

36A. Services by way of reinsurance of the insurance schemes specified in serial

— of industrial plots or plots for development of infrastructure for financial

55A. Services by way of artificial insemination of livestock (other than horses)

65B. Services supplied by a State Government to Excess Royalty Collection

66. Services provided,

(a) By an educational institution to its students, faculty and staff;

(aa) by an educational institution by way of conduct of entrance examination against

(b) To an educational institution, by way of,

iii. Security or cleaning or house-keeping services performed in such

❖ Educational institution: means an institution providing services by way of,-

77A. Services provided by an unincorporated body or a non-profit entity registered

(ii) promotion of trade, commerce, industry, agriculture, art, science, literature,

4. Inter-State supply of services having place of supply in Nepal or Bhutan, against

5 Services received from a provider of service located in a non- taxable territory by

(i) pre-school education and education up to higher secondary school or

IGST leviable on import of services in relation to temporary transfer or permitting

Input Tax Credit

Central Goods and Service Tax (CGST) Rules, 2017

Rule 37 - Reversal of input tax credit in the case of non-payment of consideration.

Cancellation of registration [Section 29]

Circumstances where registration is liable to be cancelled [Section

A. Circumstances when the registration can be cancelled either suo motu by

(a) Following contraventions done by the registered person:

Procedure for cancellation of registration

• A registered person seeking cancellation of registration shall electronically submit

• He is required to furnish in the application the details of inputs held in stock or

• Where a person who has submitted an application for cancellation of his

• The cancellation of registration shall be effective from a date to be determined by

Reversal of credit [Section 29(5) & (6)]

(ii) the output tax payable on such goods

whichever is higher, calculated in such manner as may be prescribed.

Revocation of cancellation of registration [Section 30 read with rule

➢ However, in case registration was cancelled for failure of registered person to

List of various Forms

SL No Form No Title of the Form

1 GST-REG- Application for registration

3 GST-REG- Notice Seeking Additional information/ clarification/

4 GST-REG- Furnishing clarification sought in GST REG-03

5 GST-REG- Order of rejection of Application

6 GST-REG- Registration Certificate issued

7 GST-REG- Application for Regn of Tax Deductor / Tax Collected at

8 GST-REG- Order of cancellation of registration as Tax deductor or Tax

9 GST-REG- Application for Registration for Non-Resident Taxable

10 GST- REG- Application for registration for OIDRS by Non-Resident

11 GST-REG- Application for extension in period of causal taxable person

12 GST-REG- Temporary Suo Moto Registration

13 GST-REG- Application to grant UID

Goods transported in SKD/CKD condition or in batches or lots