Circular No. 38/2016-Customs Dated 22/08/2016
Guidelines regarding Provisional Assessment under section 18 of the Custom Act, 1962-
To,
All Principal Chief Commissioners of Customs / Customs & Central Excise
All Chief Commissioners of Customs,
All Chief Commissioners of Customs & Central Excise, All Directorate-Generals,
Chief Departmental Representative,
All Principal Commissioners of Customs,
All Principal Commissioners of Customs & Central Excise,
All Commissioners of Customs, All Commissioners of Customs & Central & Excise
Subject:- Guidelines regarding Provisional Assessment under section 18 of the Customs Act, 1962
The Customs (Provisional Duty Assessment) Regulations 2011 issued under notification no. 81/2011 - Customs (NT) dated 25.11.2011 were reviewed in view of references from the field formations regarding guidelines on the implementation of Regulation 2(2) and Regulation 4.
2. Regulations 2(2), 3 and 4 require three elements - namely, (a) deposit of 20% of the differential duty between "provisional duty" and duty to be "finally assessed or re-assessed"; (b) execution of a bond; and (c) surety or security or both, as deemed fit.
2.1 Section 18 of the Customs Act, 1962 defines the cases where provisional assessment may be resorted, as under: -
(7) Notwithstanding anything contained in this Act but without prejudice to the provisions of section 46,-
(a) where the importer or exporter is unable to make self-assessment under sub-section (1) of section 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,
2.2 Further, Section 18 goes on to state how a provisional assessment is to be carried out:
"the proper officer may direct that the duty leviable on such goods be assessed provisionally if the importer or the exporter, as the case may be, furnishes 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."
2.3 Thus, the provisions of section 18 of the Customs Act, 1962, require that in cases where goods are to be provisionally assessed:
(a) the importer binds himself for the payment of deficiency, if any, between the duty as may be finally assessed and the duty provisionally assessed; and
(b) furnishes such security as the proper officer deems fit for the payment of the deficiency.
2.4 In view of the requirement that the importer binds himself to pay the deficiency, if any, between the duty as may be finally assessed and the duty provisionally assessed, it would be necessary to obtain a bond for meeting the aforesaid condition.
2.5 Insofar as the requirement of obtaining a 20% deposit of the duty provisionally assessed, the Board has decided that this condition be dispensed, particularly, as it necessitates following the procedure of refunds in cases where final assessment is in favour of the importer. Such requirements add to the transaction costs, lead to delays in clearance and detract from the ease of doing business.
2.6 It was also noted that Regulation 4 required that the importer should furnish such surety or security or both, as deemed fit, along with the Bond. In this connection, it was felt that acceptance of a surety requires making an evaluation of the underlying asset value or of the net worth of the person executing the same. This poses difficulties to the importers as well as administrative challenges to the Department in valuing sureties. Therefore, the Board has decided that the requirement of security needs to be met by either obtaining a bank guarantee or a cash deposit, as convenient to the importer, and that no sureties shall be obtained.
2.7 In view of the aforesaid, the Board has rescinded "The Customs (Provisional Duty Assessment) Regulations 2011" vide notification no. 113/2016 - Cus (NT) dated 22nd August 2016 since section 18 itself lays down the procedure to be followed in the case of provisional assessment. The only issue which is required to be addressed is regarding the amount of security since section 18 requires the same to be obtained as "deemed fit" by the proper officer. For the sake of uniformity of practice, transparency and predictability for the tax payer, the Board has decided that the following procedure and guidelines will be followed by all Customs stations while assessing goods provisionally:
2.8 Wherever, duty is to be assessed provisionally, the importer shall:
(a) 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, execute a bond in the prescribed form (enclosed); and
(b) furnish such security for the payment of the duty deficiency, as indicated in para 3 below.
2.9 The security to be obtained shall be in the form of a bank guarantee or a cash deposit, as convenient to the importer.
3. The following guidelines shall be followed while obtaining security where provisional assessment under section 18 of the Customs Act is being undertaken:
|
SI. No. |
Class
of Importer |
Amount of Bank Guarantee or Cash
deposit to be obtained as "security" of the differential duty |
Remarks |
|
1. |
Imports
by Authorised
Economic Operators (AEO -T3) |
2[0% (including cases at serial no. 4 to 6(b). except 5(a), 5(c) and 5(d)(i)). ]
old[1[0 %
|
In terms of Circular no.
33/2016-Customs dated 22nd
July 2016, as amended. |
|
2. |
Imports
by
Authorised Economic Operators (AEO - T1 and AEO - T2) (excluding
importers mentioned at SI. No.3) • |
1[(a) 0% (in terms of SI.
No. 5 (b), 6(a) and 6(b) (2) |
In terms of Circular no. 33/2016-Customs
dated 22nd July 2016, as amended. |
|
3. |
Imports
by Public
Sector Undertakings /
Government (Central/State/UT
and their
undertakings) |
0% (including cases
at SI. No. 4 to 6b.) |
|
|
4. |
Cases referred to
SVB |
As
per circular No.5/2016-Customs dated 9.2.2016 issued from F. No.
465/12/2010-CusV |
|
|
5(a) |
Cases related to verification of
origin under FTAs based on the reasonable belief that the matter
involves mis-declaration of origin/value addition. |
100% |
1[In terms of Rule 5 or Rule 6(1)(b) of CAROTAR, 2020 (notification no. 81/2020 dated 21.08.2020)]
old[Based
upon "Operational Certification Procedures" contained in the
non-tariff notifications issued on Rules
for determination of Origin |
|
5(b) |
Cases
selected on
random basis for verification of
origin. |
0% |
|
|
2[5 (c) |
Cases related to verification of signatures and seals under FTAs, where there is a doubt regarding genuineness or authenticity of the certificate of origin for reasons such as mismatch of signatures or seal when compared with specimens of seals and signatures received from the exporting country in terms of the trade agreement |
100% |
In terms of Rule 6(1)(a) of CAROTAR,2020 (notification no. 81/2020-Customs (NT), dated 21.08.2020)] |
|
old[5(c) |
Cases related to
verification of signatures and
seals under FTAs |
100% |
1[In terms of Rule 6(1)(a)
of CAROTAR, 2020 (notification no. 81/2020 dated 21.08.2020) ]
] |
|
3[5 (d) |
Cases covered under Circular no. 18/2020-Customs dated 11.04.2020 where original hard copy of certificate of origin (COO) under FTA has not been submitted or only digitally signed copy or unsigned copy of COO is submitted |
100% |
(i) Where there is a
reasonable belief that the case involves misdeclaration of origin or
value addition. |
|
6(a) |
Cases, where the importer is not
able to
make self-assessment
and has sought provisional
assessment. |
Not
applicable |
As
this such cases will be provisionally
assessed by the proper officer as deemed fit. |
|
6(b) |
Cases,
where the proper officer deems it necessary to order a provisional
assessment, whether for the purposes of chemical
test or requirement of information
or
causing inquiries: (1)
Where differential duty (2)
Where, despite
best |
100%
0% |
Provided
that the Principal Commissioner of Customs
or the Commissioner of Customs may reduce the amount of security where there are good
& justifiable reasons to do so. N.A. |
3.1 By way of a clarification, attention is also drawn to an earlier instruction of the Ministry contained in F.No. 511/7/77-Cus VI dated 09.011978, to the effect that the amount of security shall be determined on the basis of duty differential and not the CIF value of goods.
3.2 It is also clarified that provisional assessments under section 18 are to be carried out with respect to cases where the duty is in dispute. Cases relating to execution of a bond or undertaking specified as a condition to a notification or those requiring compliance of conditions under allied acts are not to be provisionally assessed under section 18 of the Customs Act. This position had been earlier clarified by the Ministry of Law and Justice and circulated vide Ministry F.No. 353 / 91 / 74 - Cus dated 28th January 1977.
4 Difficulties, if any, may be brought to the notice of the Board.
5. Hindi version follows.
Yours faithfully,
End: Format of bonds
(S. Kumar)
Commissioner (Customs)
Bond
Individual Importation
(With Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods with bank guarantee/cash deposit under
section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No. 38 /2016-Customs dated 22/08/2016 issued from CBEC F.No:
465/01/2016 - Cus V)
KNOW ALL MEN BY THESE PRESENTS THAT We M/s _____________________having our registered office located at _______________and holding Import-Export Code No._________________ hereinafter called the "Importer" (which expression shall include its successors/heirs, executors, administrators and legal representatives) are held and firmly bound unto the President of India hereinafter called the "President" (which expression shall include his successors and assigns) in the sum of Rs _________________Rupees (please fill amount in words) to be paid to the President for which payment well and truly to be made, we bind ourselves, our successors, heirs, executors, administrators and legal representatives firmly by these presents.
Sealed with our seal(s) this___ day of ____20_
WHEREAS the Assistant Commissioner of Customs/Deputy Commissioner of Customs at the _______ (place), (hereinafter called the "proper officer") has agreed to make provisional assessment of the goods imported by us, pending submission of further documents and/or furnishing information and/or completion of further enquiries and/or chemical test and/or other test and the Proper Officer has agreed to allow provisional assessment of the goods mentioned in the schedule hereto annexed upon the importer agreeing to furnish such bond as is herein contained; and
WHEREAS the importer has deposited with the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, at_________ (location),
1 a bank guarantee;
OR
1 a cash deposit
mentioned in the schedule hereunder for the due observance of and performance of the terms and undertakings on the part of the importer and for being applied in part or full towards the indemnity hereby given or otherwise according to law.
1 strike out whatever is not applicable
NOW THE CONDITION of the above written bond is such that -
(1) If the importer shall within _______days or within such extended period as the Proper Officer may allow, produce such documents and furnish such information as may be called for by the Proper Officer, and
(2) If the importer pays to the President, the difference between the duty finally assessed and the duty provisionally assessed in respect of the imported goods and mentioned in the Schedule hereto annexed.
Then the above written bond shall be void and of no effect; otherwise the same shall remain in full force and virtue.
AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:-
1. This bond and cash deposit/bank guarantee are given under the orders of the Central Government for the performance of an act which is in public interest.
2. The President through the [Deputy Commissioner / Assistant Commissioner of Customs] or other officer may recover the said sum of Rs in the manner laid down in Section 142 of the Customs Act, 1962 without prejudice to any other mode of recovery.
IN WITNESS WHEREOF the importer has herein set and subscribed its hands and seals the day, month and year first above written.
SIGNED AND DELIVERED by and on behalf of the importer at ________(place) in the presence of:-
(Signature of Authorised Signatory and Corporate Seal)
Witnesses:
1.
2.
Accepted for and on behalf of the President of India
(Signature of the Proper Officer)
Schedule to Bond
(Individual importation)(With Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods with bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of 1962)(Circular No.38 /2016-Customs dated 22/08/2016 issued from CBEC F.No: 465/01/2016 - Cus V)
Bill of Entry Number
Date
Value at which provisionally assessed
Bond Value
detail of Security deposit or bank guarantee whichever is applicable
Remarks (attach bank/ cash deposit reciept in original)
Signature/ date/ name/ designation of officer making the entry
(!) (2) (3) (4) (5) (6) (7)
Bond
Individual Importation
(Without Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods without bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No. 38/2016-Customs dated 22/08/2016 issued from CBEC F.No: 465/01/2016 - Cus V)KNOW ALL MEN BY THESE PRESENTS THAT We M/s ________having our registered office located at __________and holding Import- Export Code No._____________ hereinafter called the "Importer" (which expression shall include its successors/heirs, executors, administrators and legal representatives) are held and firmly bound unto the President of India hereinafter called the "President" (which expression shall include his successors and assigns) in the sum of Rs__________ Rupees (please fill amount in words) to be paid to the President for which payment well and truly to be made, we bind ourselves, our successors, heirs, executors, administrators and legal representatives firmly by these presents.
Sealed with our seal(s) this ___day ___of 20_
WHEREAS the Assistant Commissioner of Customs/Deputy Commissioner of Customs at the _______{place), (hereinafter called the "proper officer") has agreed to make provisional assessment of the goods imported by us, pending submission of further documents and/or furnishing information and/or completion of further enquiries and/or chemical test and/or other test and the Proper Officer has agreed to allow provisional assessment of the goods mentioned in the schedule hereto annexed upon the importer agreeing to furnish such bond as is herein contained; and
NOW THE CONDITION of the above written bond is such that -
(1) If the importer shall within days or within such extended period as the Proper Officer may allow, produce such documents and furnish such information as may be called for by the Proper Officer, and
(2) If the importer pays to the President, the difference between the duty finally assessed and the duty provisionally assessed in respect of the imported goods and mentioned in the Schedule hereto annexed.
Then the above written bond shall be void and of no effect; otherwise the same shall remain in full force and virtue.
AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:-
1. This bond is given under the orders of the Central Government for the performance of an act which is in public interest
. 2. The President through the [Deputy Commissioner / Assistant Commissioner of Customs] or other officer may recover the said sum of Rs in the manner laid down in Section 142 of the Customs Act, 1962 without prejudice to any other mode of recovery.
IN WITNESS WHEREOF the importer has herein set and subscribed its hands and seals the day, month and year first above written.
SIGNED AND DELIVERED by and on behalf of the importer at [place) in the presence of:-
(Signature of Authorised Signatory and Corporate Seal)
Witnesses:
1.
2.
Accepted for and on behalf of the President of India
(Signature of the Proper Officer)
Schedule to Bond
(Individual importation)(Without Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods without bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No. 38/2016-Customs dated 22/08/2016 issued from CBEC F.No: 465/01/2016 - Cus V)
Bill of Entry Number
Date
Value at which provisionally assessed
Bond Value
Remarks (if any)
Signature/ date/ name/ designation of officer making the entry
(!) (2) (3) (4) (6) (7)
Continuity Bond
(With Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods with bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No.38 /2016-Customs dated 22/08/2016 issued from CBEC F.No: 465/01/2016 - Cus V)KNOW ALL MEN BY THESE PRESENTS THAT We M/s _______________having our registered office located at _________and holding Import-Export Code No._________ hereinafter called the "Importer" (which expression shall include its successors/heirs, executors, administrators and legal representatives) are held and firmly bound unto the President of India hereinafter called the "President" (which expression shall include his successors and assigns) in the sum of Rs ________Rupees __________(please fill amount in words) to be paid to the President for which payment well and truly to be made, we bind ourselves, our successors, heirs, executors, administrators and legal representatives firmly by these presents.
Sealed with our seal(s) this__ day ___of 20_
WHEREAS the Assistant Commissioner of Customs/Deputy Commissioner of Customs at the _______(place), (hereinafter called the "proper officer") has agreed to make provisional assessment of the goods imported from time to time by us, pending submission of further documents and/or furnishing information and/or completion of further enquiries and/or chemical test and/or other test and the Proper Officer has agreed to allow provisional assessment of the goods mentioned in the schedule hereto annexed upon the importer agreeing to furnish such bond as is herein contained; and
WHEREAS the importer has deposited with the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, at_______ (location),
1 a bank guarantee;
OR
1 a cash deposit
mentioned in the schedule hereunder for the due observance of and performance of the terms and undertakings on the part of the importer and for being applied in part or full towards the indemnity hereby given or otherwise according to law.
1 strike out whatever is not applicable
NOW THE CONDITION of the above written bond is such that -
(1) If the importer shall within days or within such extended period as the Proper Officer may allow, produce such documents and furnish such information as may be called for by the Proper Officer, and
(2) If the importer pays to the President, the difference between the duty finally assessed and the duty provisionally assessed in respect of the goods imported from time to time and mentioned in the Schedule hereto annexed.
Then the above written bond shall be void and of no effect; otherwise the same shall remain in full force and virtue.
AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:-
1. This bond and cash deposit/bank guarantee are given under the orders of the Central Government for the performance of an act which is in public interest.
2. The President through the [Deputy Commissioner / Assistant Commissioner of Customs] or other officer may recover the said sum of Rs in the manner laid down in Section 142 of the Customs Act, 1962 without prejudice to any other mode of recovery.
3. This bond and the cash deposit/bank guarantee shall remain in force from the date hereof and the obligation and liability of the importer shall be a continuing one in respect of all goods imported from time to time by the importer between the period of and the payment by the importer of the difference between the duty finally assessed and the duty provisionally assessed in respect of the goods imported from time to time.
IN WITNESS WHEREOF the importer has herein set and subscribed its hands and seals the day, month and year first above written.
SIGNED AND DELIVERED by and on behalf of the importer at {place) in the presence of:-
(Signature of Authorised Signatory and Corporate Seal)
Witnesses:
1.
2.
Accepted for and on behalf of the President of India
(Signature of the Proper Officer)
Schedule to Continuity Bond
(With Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods with bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No. 38 /2016-Customs dated 22/08/2016 issued from CBEC F.No: 465/01/2016 - Cus V)
Bill of Entry Number Date Value at which provisionally assessed Bond Value Balance of Bond value Detail of security deposit or bank guarantee whichever is applicable Balance of security depositor bank guarantee( whichever is applicable) Remarks (attach bank guarantee/ cash deposit reciept in original) Signature/ date/ name/ designation of officer making the entry (!)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Continuity Bond
(Without Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods without bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No.38 /2016-Customs dated 22/08/2016 issued from CBEC F.No: 465/01/2016 - Cus V)KNOW ALL MEN BY THESE PRESENTS THAT We M/s ______having our registered office located at_____ and holding Import-Export Code No._______ hereinafter called the "Importer" (which expression shall include its successors/heirs, executors, administrators and legal representatives) are held and firmly bound unto the President of India hereinafter called the "President" (which expression shall include his successors and assigns) in the sum of Rs_______ Rupees_______ (please fill amount in words) to be paid to the President for which payment well and truly to be made, we bind ourselves, our successors, heirs, executors, administrators and legal representatives firmly by these presents.
Sealed with our seal(s) this__ day __of 20_
WHEREAS the Assistant Commissioner of Customs/Deputy Commissioner of Customs at the _____(place), (hereinafter called the "proper officer") has agreed to make provisional assessment of the goods imported from time to time by us, pending submission of further documents and/or furnishing information and/or completion of further enquiries and/or chemical test and/or other test and the Proper Officer has agreed to allow provisional assessment of the goods mentioned in the schedule hereto annexed upon the importer agreeing to furnish such bond as is herein contained; and
NOW THE CONDITION of the above written bond is such that -
(1) If the importer shall within days or within such extended period as the Proper Officer may allow, produce such documents and furnish such information as may be called for by the Proper Officer, and
(2) If the importer pays to the President, the difference between the duty finally assessed and the duty provisionally assessed in respect of the goods imported from time to time and mentioned in the Schedule hereto annexed. Then the above written bond shall be void and of no effect; otherwise the same shall remain in full force and virtue.
AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:-
1. This bond is given under the orders of the Central Government for the performance of an act which is in public interest.
2. The President through the [Deputy Commissioner / Assistant Commissioner of Customs] or other officer may recover the said sum of Rs in the manner laid down in Section 142 of the Customs Act, 1962 without prejudice to any other mode of recovery.
3. This bond shall remain in force from the date hereof and the obligation and liability of the importer shall be a continuing one in respect of all goods imported from time to time by the importer between the period of and the payment by the importer of the difference between the duty finally assessed and the duty provisionally assessed in respect of the goods imported from time to time.
IN WITNESS WHEREOF the importer has herein set and subscribed its hands and seals the day, month and year first above written.
SIGNED AND DELIVERED by and on behalf of the importer at ________(place) in the presence of:-
(Signature of Authorised Signatory and Corporate Seal)
Witnesses:
1.
2.
Accepted for and on behalf of the President of India
(Signature of the Proper Officer)
Schedule to Continuity Bond
(Without Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods without bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of 1962) (Circular No. 38 /2016-Customs dated 22/08/2016 issued from CBEC F.No: 465/01/2016 - Cus V)
Bill of Entry Number
Date
Value at which provisionally assessed
Bond Value
Balance of Bond value
Remarks (if any)
Signature/ date/ name/ designation of officer making the entry
(!) (2) (3) (4) (5) (6) (7)
Refer:- Circular No. 04/2025-Customs Dated 17/02/2025
1. Substituted Vide: Circular No. 42/2020-Customs dated 29/09/2020
2. Substituted Vide: Circular No. 19/2021-Customs dated 16/08/2021
3. Inserted Vide: Circular No. 19/2021-Customs dated 16/08/2021