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Self Assessment In Customs
The Central Board of Customs and Excise ('CBEC') issued a Circular on 8 April 2011 providing guidelines on the 'Implementation of Self Assessment in customs'. Self assessment is a trade facilitation initiative introduced in Customs during the recent Budget. In addition to bringing in the concept of 'self assessment' and 'post clearance audit' in customs, the Finance Act, 2011 ("Act") has also amended relevant provisions of the Customs Act thus providing a legal framework to electronic filing of documentation and computer assisted assessment based on risk profiling of imports and exports. Taxand India analyses the key amendments as a result of the Act.
The Act together with the evolving concept of Authorised Economic Operator ('AEO'), will go a long way in reducing the dwell time of goods through the customs frontiers in India and will also help in reducing the transaction cost at the time of import or export. These changes signal a new era in customs clearances in India because, going forward, the primary responsibility of assessment shifts to importer / exporter, and thus the trade becomes a significant stakeholder in interpretation and implementation of customs laws and procedures.
'Self assessment' and 'post clearance audit' procedures will stimulate the facilitation of trade in customs. These initiatives will help to expedite the clearance of goods at the port of clearance while shifting the primary responsibility of assessment on the business.
The importer / exporter may have to adapt to this change in responsibility by bringing extra focus on the customs function in their supply chain and also by re-skilling the supply chain team so as to be 'audit ready' for an on-site customs audit.
The success of the 'self assessment' initiative will pave the way for the introduction of the AEO concept in India. In time it may progress to periodic payment of customs duty as opposed to the current procedure of paying consignment based customs duty.
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