Amendment In Merchant Overtime Fee

Section 36 of the Customs Act, 1962 levies restrictions on the unloading and loading goods on holidays or any other day after working hours. Further, the said section provides that the limitation so levied can be withdrawn by giving prescribed notice and on payment of appropriate fees. Such reasonable fees payable by the

importer/exporter for services rendered by the Customs officer beyond regular working hours or on holidays are termed ‘Merchant Overtime Fees.’ The Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998, contains provisions relating to the rates and manner of collection of the said ‘Merchant Overtime Fee.’ The current article highlights the recent amendment and board clarification on the merchant overtime fee.

Recent Amendment Affecting Merchant Overtime Fee

Regulation 3 of the Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998 contains provisions relating to the levy of fees for rendering services. Below mentioned is the rate chart provided in regulation 3 –

Class of officers	Fee per hour or part thereof on working days (In INR)	Fee per hour or part thereof on holidays (In INR)
	6 AM to 8 PM	8 PM to 6 AM	6 AM to 8 PM	8 PM to 6 AM
1. Appraisers, Superintendent (Customs Preventive), and Superintendent (Central Excise)	85	125	140	180
2. Air Customs Officers, Examiners, Preventive Officers, and Inspectors of Central Excise	75	100	105	145
3. Class IV staff	35	45	55	60

Vide notification no. 46/2016-Customs (N.T.) dated 1

st April 2016, a proviso has been inserted after the above table. The said proviso provides that where working hours in respect of cargo clearance in Customs ports or airports have been prescribed as 24 hours on all days for customs clearance, no fee shall be leviable in such location for services provided by the class of officers mentioned in the above table. The above proviso is self-explanatory and states that no fees, i.e., MOT charges, are required to be paid for services provided by the customs officers at the port or airports providing 24x7 services.

Clarification Regarding Mot Charges At CFS (i.e., Customs Freight Station)

The Central Board of Excise & Customs, vide circular no. 04/2017- Customs, dated 16

th February 2017, has clarified the applicability of no MOT charges regarding the stuffing of export goods at CFS. The clarification provided in the circular is briefed here under –

The board has clarified in the above-referred circular that CFS is an extension of the port. CFS has played a vital role in the faster clearance of EXIM goods, shifting the bulk of regulatory activity, other than appraising, to CFS.
A Proviso to regulation three, i.e., no MOT charges provisions, applies to services like verification of seals, etc., provided by the customs officer towards the factory stuffed containers.
The board has clarified that since the work carried out in the CFS is an extension of the clearance activity at the port; no MOT charges are payable in case of services rendered by the customs officer within the CFS premises.

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Frequently Asked Questions

Common questions about Amendment in Merchant Overtime Fee.

A Merchant Overtime Fee (MOT) is a reasonable fee payable by the importer/exporter for services rendered by the Customs officers beyond regular working hours or on holidays. It is levied under Section 36 of the Customs Act, 1962, and the rates are prescribed in the Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998.

The Merchant Overtime Fee is payable when an importer or exporter requires the services of Customs officers beyond regular working hours or on holidays for activities such as unloading, loading, or clearance of goods.

The rates for Merchant Overtime Fees are prescribed in Regulation 3 of the Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998. The fees vary depending on the class of Customs officers involved and whether the services are rendered on working days or holidays, as well as the time of day.

No, the Merchant Overtime Fee is not applicable at Customs ports or airports that provide 24-hour cargo clearance services. A proviso in Regulation 3 exempts such locations from levying MOT charges for services provided by Customs officers.

No, Merchant Overtime Fees are not payable at Customs Freight Stations (CFS) for services rendered by Customs officers within the CFS premises. The Central Board of Excise & Customs has clarified that CFS is an extension of the port, and the exemption from MOT charges applicable to ports also extends to CFS.

The Merchant Overtime Fee is intended to compensate the Customs department for the additional costs incurred in providing services beyond regular working hours or on holidays, ensuring efficient and timely clearance of goods for importers and exporters.

Importers and exporters can avoid paying Merchant Overtime Fees by scheduling their cargo clearance activities during regular working hours at ports or airports that do not operate 24/7. They may also consider using Customs Freight Stations (CFS) to minimize the need for Customs officers' services during overtime hours.

The importer or exporter who requires the services of Customs officers beyond regular working hours or on holidays is responsible for paying the Merchant Overtime Fee.

Yes, the Merchant Overtime Fee rates prescribed in the Customs (Fees for Rendering Services by Customs Officers) Regulations, 1998, can be amended by the government through notifications as deemed necessary.

The legal basis for levying the Merchant Overtime Fee is Section 36 of the Customs Act, 1962, which allows for the withdrawal of restrictions on unloading and loading goods on holidays or after working hours, subject to payment of appropriate fees.