Economy
Self-declaration to simplify duty payments and refunds for businesses: CBIC chief
Summary
- An amendment to the Customs Act in the Finance Bill 2025 streamlines tax refunds and duty payments, allowing businesses to self-correct declarations post-clearance. The reform aligns India with global best practices, aiming to enhance trade efficiency and support ambitious export targets.
NEW DELHI : The Centre has introduced a major simplification to customs procedures through an amendment in the Finance Bill 2025, aimed at enhancing ease of doing business for importers and exporters. The reform allows businesses to voluntarily revise customs declarations after clearance—either to pay additional duty or claim refunds—without undergoing time-consuming appeal processes.
According to Central Board of Indirect Taxes and Customs (CBIC) chairperson Sanjay Kumar Agarwal, the amendment enables businesses to self-assess their tax obligations and make corrections if they discover discrepancies. This change eliminates bureaucratic hurdles, offering a direct mechanism for compliance.
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“A very big change has been made in procedure for ease of doing business. To encourage voluntary compliance, a facility for making a voluntary declaration if new material facts come to the notice of an importer or exporter, has been provided," Agarwal told Mint in an interview.
Earlier, if businesses failed to pay an applicable duty—such as an anti-dumping tax—they had to engage in a complex process involving departmental approvals before rectifying the oversight. Similarly, claiming refunds for excess duty required an appeal against self-assessment, an appellate order, and further administrative approvals.
The new framework streamlines this by treating voluntary declarations as direct applications for payment or refunds, significantly reducing processing time.
"Now this entire procedure has been cut short, and if by making this declaration it emerges that there is excess payment of duty, then this declaration itself will be treated as a refund application. So, the entire process of going into appeal, obtaining an appellate order, which may take a year, has been cut short. It's a major simplification," said Agarwal.
Budget documents outline that the newly introduced section in the Customs Act of 1962 allows businesses to voluntarily revise their customs declarations post-clearance within a prescribed timeframe. This provision treats such revisions as self-assessments, enabling businesses to either pay additional duty or claim refunds without undergoing lengthy appeals, according to the explanation to the Finance Bill 2025.
Agarwal highlighted another key reform in the bill: a definitive time limit of two years for finalizing any provisional assessment, extendable by one year with supervisory approval in exceptional cases.
“Now a time limit has been set. This is a major reform," Agarwal said, emphasizing that it provides businesses with greater certainty and efficiency. This provision will be welcomed by every importer and exporter, he added.
Experts see the reform as a step toward aligning India’s customs procedures with global best practices. Rajat Mohan, Senior Partner at AMRG & Associates, noted that Section 18A brings India in line with countries like Australia, the UK, and the European Union, where businesses can revise customs declarations post-clearance to ensure compliance while minimizing procedural hurdles.
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“Compared to these international frameworks, India’s Section 18A is a positive reform that could enhance trade efficiency and reduce litigation," Mohan said.
He, however, stressed the need for clear procedural guidelines to prevent misuse, particularly in refund claims, and to define critical aspects such as timelines, interest implications, and post-clearance scrutiny. The success of this provision, he added, will depend on a strong digital infrastructure, well-structured compliance mechanisms, and industry awareness programmes.
India has been actively reforming its import-export framework in recent years, introducing measures like faceless assessments to improve ease of doing business. The latest changes come as the country aims to expand its presence in the global market amid rising geopolitical challenges.
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India has set an ambitious target of reaching $2 trillion in goods and services exports by 2030, up from $776.7 billion in FY24.
