Customs Act, 1962 Section 47 — Clearance of goods for home consumption
Customs Act, 1962 · Clearance of goods for home consumption
Plain-English Explanation
Overview
Section 47 of the Customs Act, 1962, governs the clearance of imported goods for home consumption. It outlines the conditions that must be met before customs authorities can release goods for use within India, primarily focusing on duty payment and compliance with regulations. This section is critical for importers as it dictates when and how they can access their imported goods.
Who Does This Apply To?
This section applies to:
- Importers: Individuals or businesses importing goods into India for domestic use.
- Customs Officers: The "proper officer" responsible for assessing duties and permitting the clearance of goods.
- Central Government: Empowered to issue notifications regarding deferred duty payment and interest rates.
How It Works
The process for clearing goods for home consumption under Section 47 involves the following steps:
- Filing the Bill of Entry: The importer files a bill of entry declaring the imported goods.
- Assessment and Duty Calculation: The "proper officer" (or self-assessment by the importer) assesses the import duty payable on the goods.
- Duty Payment: The importer pays the assessed duty and any other applicable charges under the Customs Act.
- Examination and Compliance: The proper officer verifies that the goods are not prohibited goods.
- Clearance Order: If the officer is satisfied, they issue an order permitting the clearance of goods for home consumption. This order can be issued electronically through the customs automated system based on risk evaluation.
- Time Limit for Payment:
- In case of self-assessment, import duty shall be paid on the date of presentation of bill of entry.
- In case of assessment or reassessment or provisional assessment, the import duty shall be paid within one day (excluding holidays) from the date on which the bill of entry is returned to the importer by the proper officer for payment.
Important Conditions & Exceptions
- Condition 1: Goods must not be prohibited goods as defined under the Customs Act, 1962 or any other applicable law.
- Condition 2: All assessed import duties and applicable charges must be paid in full (unless deferred payment is permitted).
- Deferred Payment: The Central Government can allow certain classes of importers to make deferred payment of duty and charges, as per rules.
- Interest on Delayed Payment: If the importer fails to pay the duty within the specified time, they are liable to pay interest on the outstanding amount. The interest rate is determined by the Central Government, ranging from 10% to 36% per annum. The Board can waive the whole or part of any interest payable under this section, in the public interest.
- Electronic Payment: The Central Government can specify classes of importers who must pay duty electronically.
Practical Example
ABC Importers files a bill of entry for machinery valued at INR 1,00,00,000. The proper officer assesses the import duty at 10%, totaling INR 10,00,000. ABC Importers pays the INR 10,00,000 duty within one day of receiving the bill of entry after assessment. The customs officer, after verifying that the machinery is not a prohibited good, issues a clearance order, allowing ABC Importers to take possession of the machinery for use in their factory. If ABC Importers paid the duty after 3 days (excluding holidays) of receiving the assessed bill, they'd also have to pay interest at a rate specified by the government (e.g., 12% per annum) on the delayed payment.
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
What conditions must be met for imported goods to be cleared for home consumption under Section 47 of the Customs Act, 1962?
Under Section 47(1), the proper officer must be satisfied that the goods are not prohibited and the importer has paid all applicable import duties and charges. Once these conditions are met, the officer may issue an order permitting clearance for home consumption. This order can also be issued electronically through the customs automated system based on risk evaluation.
What is the time limit for paying import duty under Section 47(2) of the Customs Act, 1962, and what happens if I miss the deadline?
The time limit for paying import duty under Section 47(2) depends on the assessment type. If it's a self-assessment, payment is due on the date of presentation of the bill of entry. For assessed, reassessed, or provisionally assessed entries, payment is due within one day (excluding holidays) from when the bill of entry is returned. Failure to pay on time attracts interest on the unpaid amount, ranging from 10% to 36% per annum as notified by the Central Government.
Can I defer payment of import duty under Section 47 of the Customs Act, 1962, and if so, what are the requirements?
Yes, the Central Government can permit certain classes of importers to make deferred payments of duties and charges, as per the proviso to Section 47(1). The specific manner and due dates for deferred payment are specified by rules. Note that only specifically authorized importers can avail themselves of this facility.
How does the customs automated system affect the clearance of goods under Section 47 of the Customs Act, 1962?
The proviso to Section 47(1) allows for the electronic issuance of clearance orders through the customs automated system. This is based on risk evaluation through appropriate selection criteria, streamlining the clearance process. This facilitates faster processing and reduces physical intervention, promoting trade facilitation.
Are there any provisions for waiving interest on late payment of import duty under Section 47 of the Customs Act, 1962?
Yes, the third proviso to Section 47(2) allows the Board to waive the whole or part of the interest payable on late payment of import duty. This can only be done if the Board is satisfied that such a waiver is necessary in the public interest, and the reasons for the waiver must be recorded in an order.
Which classes of importers are required to pay import duty electronically under Section 47 of the Customs Act, 1962?
The Central Government has the authority to specify, via notification in the Official Gazette, which class or classes of importers are required to pay import duty electronically, as per the first proviso to Section 47(2). This mandatory electronic payment promotes transparency and efficient collection of duties.
If my bill of entry was returned before the Customs (Amendment) Act, 1991, but I didn't pay the duty until after its commencement, how does Section 47 apply?
The second proviso to Section 47(2) clarifies that if the bill of entry was returned before the commencement of the Customs (Amendment) Act, 1991, and the importer hadn't paid the duty before its commencement, the date of the return of the bill of entry is deemed to be the date of such commencement for the purpose of Section 47. This effectively resets the timeline for payment according to the amended law.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Goods not prohibited & duties/charges paid | The proper officer must be satisfied that the goods are not prohibited and the importer has paid all applicable import duties and charges before clearance. |
| Electronic order via customs automated system | Clearance order can be made electronically through the customs automated system based on risk evaluation criteria. |
| Deferred payment for certain importers (notification) | The Central Government can allow specific classes of importers to defer payment of duties and charges via notification. |
| Payment due date: self-assessment | Import duty must be paid on the date of presentation of the bill of entry for self-assessed entries. |
| Payment due date: officer assessment | Import duty must be paid within one day (excluding holidays) from when the bill of entry is returned after assessment. |
| Interest on delayed payments | Failure to pay duty within the specified time results in interest on the unpaid or short-paid amount. |
| Interest rate range on delayed payments | Interest rate for delayed payments can range from 10% to 36% per annum, as notified by the Central Government. |
| Electronic payment mandate | The Central Government can mandate electronic payment of duties for specified classes of importers via notification. |
Amendment History
Section 47 re-numbered as sub-section (1) of that section by section 3 of the Customs (Amendment) Act, 1991 (55 of 1991), (w.e.f. 23-12-1991).
Inserted (w.e.f. 14-5-2016) by section 121(a) of the Finance Act, 2016 (28 of 2016).
Substituted by section 77 (w.e.f. 29-3-2018) of Finance Act, 2018 (13 of 2018), for "Provided that".
Inserted (w.e.f. 23-12-1991) by section 3 of the Customs (Amendment) Act, 1991 (55 of 1991).
Substituted by section 101 of the Finance Act, 2017(7 of 2017). Earlier these words were substituted (w.e.f. 14-5-2016) by section 121(b) of the Finance Act, 2016 (28 of 2016). Before substitution by the Finance Act, 2017, these words stood as under: " Where the importer fails to pay the ;import duty, either in full or in part, within two days (excluding holidays) - (a) from the date on which the bill of entry is returned to him for payment of duty; or (b) in the case of deferred payment under the proviso to sub-section (1), from such due date as may be specified by rules made in this behalf, he shall pay interest on the duty not paid or short-paid till the date of its payment, at such rate, not below ten per cent and not exceeding thirty-six per cent per annum, as maybe fixed by the Central Government, by notification in the Official Gazette."
Substituted (w.e.f. 28-5-2012) for "Provided that" by section 124(a) of the Finance Act, 2012 (23 of 2012)..
Inserted (w.e.f. 26-5-1995) by section 59(b) of the Finance Act, 1995 (22 of 1995).
Substituted (w.e.f. 28-5-2012) for "Provided further that" by section 124(b) of the Finance Act, 2012 (23 of 2012).