Customs Authority for Advance Ruling
We discussed and finalized the simplification of the customs procedure in the Kyoto Convention of WCO. They were adopted in June 1999 as a blueprint for modern and efficient customs procedures. Article 3 of the WTO agreement on Trade Facilitation makes it mandatory for all the member countries to have Advance Ruling.What is Article 3 of Advance Rulings?
All members must issue an advance ruling in a reasonable, time-bound manner to the applicant who has submitted a written request containing all the necessary information. If any of the members decline to issue the advance ruling, they must promptly notify the applicant in writing and set the relevant facts and base for the decision.Why Advance Ruling?
The facility for advanced rulings in the customs matter is essential to facilitate the trade. This is an initiative of the government and commitment under WTO's Trade Facility Agreement.- To Minimize disputes
- For imparting certainty in the relevant taxation matters
- To attract the Foreign Direct Investment
- To pronounce ruling expeditiously, transparently, and inexpensively.
Statutory provisions
The statutory provisions about the advance rulings in matters relevant to customs are contained in Chapter V-B of the Customs Act, 1962. Chapter V-B substantially amended vide Finance Act, 2018 and also inserted a new section 28EA relating to the Customs Authority for Advance Rulings that empowers the Central Board of Indirect Taxes and Customs(CBIC) for appointing the officers of the rank of Principal Commissioner of the Customs or Commissioner of Customs as Customs Authority for Advance Rulings.Procedure for Advance Rulings
Customs Authority for Advance Rulings should follow the procedure prescribed under the Customs Authority for Advance Rulings Regulations,2021, notified vide Notification No. 01/2021 - Customs (N.T) date 04.01.2021. This notification has superseded the earlier Authority for Advance Rulings (Customs, Central Excise, and Service Tax) Procedure Regulation, 2005.Definition of Advance ruling under the Indian Customs Act
Pre-Finance Act 2018- Advance Ruling means the determination by the Authority of a question of law or fact specified in the application concerning the liability to pay the duty about the activity proposed to be undertaken by the applicant. The Authority for Advance Rulings is constituted under Section 245-O of the Income-tax Act,1961. Post Finance Act 2018 - Advance Ruling means a written decision on any questions referred to in section 28H raised by the applicant in the application concerning any goods before importing or exporting. The Customs Authority for Advance Rulings is appointed under Section 28EA of the Customs Act.Jurisdiction for Advance Rulings
The jurisdiction of two authorities should be determined in terms of the address that is provided by the applicant while making the application:Customs Authority for Advance Ruling in Mumbai:
Andhra Pradesh, Telangana, Karnataka, Kerala, Lakshadweep, Puducherry, Tamil Nadu, Gujarat, Dadra, and Nagar Haveli, Daman and Diu, Maharashtra, Goa, Madhya Pradesh., Chhatisgarh.Customs Authority for Advance ruling in Delhi:
Jammu and Kashmir, Himachal, Uttar Pradesh, Punjab, Chandigarh, Haryana, Delhi, Uttarakhand, Jharkhand, West Bengal, Andaman, and the Nicobar Islands, Sikkim, Odisha, Rajasthan, Meghalaya, Mizoram, Nagaland, Tripura, Ladakh.Who can seek advanced ruling?
An applicant can be any person-- Holding a valid IEC; or
- Exporting any goods to India; or
- With a justifiable cause to the satisfaction of the Authority, who makes an application for advance ruling under section 28 H;
- Any officer of customs
- The appellate tribunal or
- any court.
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