1. Section 11(2) of the Customs Act, 1962 (“the Customs Act”) will be amended to empower the Central Government to prohibit either absolutely or conditionally uncontrolled import/export of other goods apart from import/export of gold or silver to prevent injury to the economy of the country.
2. Explanation 4 to Section 28 of the Customs Act will be amended retrospectively from March 29, 2018, after the proposed amendment it reads as under:
“Explanation 4 – For removal of doubts, it is hereby declared that notwithstanding anything to the contrary contained in any judgment, decree or order of the Appellate Tribunal or Court or in any other provision of this Act or the rules or regulations made thereunder, or in any other law for the time being in force, in cases where notice has been issued for non-levy, short-levy, non-payment, short-payment or erroneous refund, prior to the 29 th day of March, 2018, being the date of commencement of the Finance Act, 2018, such notice shall continue to be governed by the provisions of section 28 as it stood immediately before such date.”
Impact: Retrospective effect from March 29, 2018 is given to Explanation 4 to Section 28 of the Customs Act which shall override any judgment/order of Tribunal/Court or any other provisions/rules/ regulations of this Act or any other law which contains anything contrary. Where notice is issued prior to March 29, 2018, then such notice shall be governed by the provisions of Section 28 of the Customs Act.
3. Section 28AAA of the Customs Act related to recovery of duties will be amended as below:
In Section 28AAA of the Customs Act, in sub-section (1), –
a) For the words “by such person”, the words “or any other law, or any scheme of the Central Government, for the time being in force, by such person” shall be substituted;
b) After the words “the rules”, the words “or regulations” shall be inserted;
c) In Explanation 1, for the words “with respect to”, the words, figures and letter “or duty credit issued under Section 51B, with respect to” shall be substituted.
Impact: The Government has widened the scope for recovery of duties from a person against utilisation of instruments issued under any other law or under any scheme of the Central Government, for the time being in force, in addition to the Foreign Trade (Development and Regulation) Act, 1992. Further, it has expanded the scope of the term “instrument” to include duty credit under the proposed newly inserted section 51B of the Customs Act.
4. A new chapter VAA for administration of rules of origin under Trade Agreement and a new section 28D for procedure regarding claim of preferential rate of duty will be inserted with the enactment of the Finance Bill, 2020.
Impact: To regulate the claim of preferential rate of duty on imported goods, government has made such insertions which will lay down the administration of rules of origin under Tarde Agreement and procedure for claim of preferential rate of duty on goods imported under a trade agreement entered into between the Government of India and the Government of a foreign country or territory or economic union.
5. Section 111 of the Customs Act will be amended for insertion of a new clause after clause (p), which is reproduced below:
“(q) any goods imported on a claim of preferential rate of duty which contravenes any provision of Chapter VAA or any rule made thereunder.”
Impact: Confiscation provisions has been extended to improperly imported goods in contravention of any provisions of proposed insertion of Chapter VAA to the Customs Act.
6. Section 156(2) of the Customs Act will be amended for insertion of a new clause after clause (h), which is reproduced below:
“(i) the form, time limit, manner, circumstances, conditions, restrictions and such other matters for carrying out the provisions of Chapter VAA.”
Impact: Empowers the Central Government to make rules for carrying out the provisions under the proposed newly insertion of Chapter VAA of the Customs Act.
7. Proposed amendments for payment facility through electronic credit ledger
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The heading of Chapter VIIA of the Customs Act will be modified as “Payments through electronic cash ledger and Electronic Duty Credit Ledger”.
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A new Section 51B will be inserted with the enactment of finance bill, 2020 to provide for creation of an electronic credit ledger in the customs automated system and manner of its utilisation.
Impact: Chapter VIIA of the Customs Act deals with the utilisation of amount available in electronic cash ledger against any payment towards duty, interest, penalty, fees or any other sum payable under the provisions of this Act or under Customs Tariff Act, 1975 (“the Customs Tariff”) or under any other law. Now in addition to electronic cash ledger provisions has been made for creation and utilisation of amount in electronic credit ledger.
8. Section 157(2) of the Customs Act will be amended for insertion of a new clause after clause (j), which is reproduced below:
“(ja) the manner of maintaining electronic duty credit ledger, making payment from such ledger, transfer of duty credit from ledger of one person to the ledger of another and the conditions, restrictions and time limit relating thereto.”
Impact: Empowers the Board to make regulations for
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Manner of maintaining electronic duty ledger
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Making of payment from the said ledger
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Transfer of duty credit from ledger of one person to the ledger of another and
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The conditions, restrictions and the time limit relating thereto.
9. Section 8B of the Customs Tariff Act will be amended to empower the Central government to apply safeguard measures including tariff – rate quota to curb increased quantity of imports of an article to prevent serious injury to domestic industry.
Impact: Scope of safeguard measures widened to include application of Tariff Rate Quota.
10. With the enactment of Section 139 of the finance bill, 2020, Health cess will be imposed at the rate of 5% on the value of import of various medical devices, not exempt from Basic Customs Duty (“BCD”).
Impact: Will boost Indian Health Care Manufacturing Industry
11. Social Welfare Cess exempted on specified edible items, construction material and completely built units of commercial vehicles. Exemption earlier available to various items of Chapter 84, 85 and 90 of the Customs Tariff withdrawn.