Friday, December 28, 2018


Customs Advance rulings is the best mechanism to determine the classification of goods and notification benefit applicability before imports into India itself and before taking major import decisions. Advance Ruling avoids wrong classifications, excess duty, value enhancements and rejection of preferential duty claims etc. Let us discuss some basic points :

1. What is Customs Advance Rulings ?
U/s 28E ( b)
“advance ruling” means a written decision on any of the questions referred to in section 28H raised by the applicant in his application in respect of any goods prior to its importation or exportation.

2.Who can apply for Customs Advance Rulings ?
U/s 28E ( C)
“applicant” means any person,-
(i) holding a valid Importer-exporter Code Number granted under section 7 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992); or
(ii) exporting any goods to India; or
(iii) with a justifiable cause to the satisfaction of the Authority,
who makes an application for advance ruling under section 28H;]
Explanation.-For the purposes of this clause, "joint venture in India" means a contractual arrangement whereby two or more persons undertake an economic activity which is subject to joint control and one or more of the participants or partners or equity holders is a non-resident having substantial interest in such arrangement;

3.What is the Binding effect of Advance Rulings ?
SECTION 28J. Applicability of advance ruling. -  The advance ruling pronounced by the Authority under section 28-I shall be binding only -
(a) on the applicant who had sought it;
(b) on the Concerned Principal Commissioner of Customs or Commissioner of Customs, and the customs authorities subordinate to him

4.On what Grounds Application for Advance Ruling will be rejected ?
u/s 28 I (2) the Authority shall not allow the application where the question raised in the application is -
(a) already pending in the applicant's case before any officer of customs, the Appellate Tribunal or any Court;
(b) the same as in a matter already decided by the Appellate Tribunal or any Court :
Provided further that no application shall be rejected under this sub-section unless an opportunity has been given to the applicant of being heard :
Provided also that where the application is rejected, reasons for such rejection shall be given in the order.

5.Functions of Advance Ruling Authority ?
The Authority gives advance ruling on questions relating to following ;
a.    Classification of goods under Customs Tariff Act 1975
b.    Applicability of notification issued under section  25(1) having a bearing on the rate of duty
c.    The principles to be adopted for the purposes of determination of value of the goods under the provisions of the Customs Act
d.     Applicability of notifications issued under Customs Act, Customs Tariff Act and chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act
e.    Determination of Origin of goods in terms of the Rules notified under the Customs Tariff Act

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